Stockmann H1 revenue €625.9 million, will cut 300 jobs
Staff Writer |
Stockmann posted its half year financial report for January 1 - June 30, 2016. Consolidated revenue was EUR 625.9 million (EUR 696.8 million).
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Revenue in continuing product areas and businesses was down by 1.8 per cent. Gross margin was up, to 52.6 per cent (49.8 per cent). Operating result was EUR -19.2 million (EUR -46.2 million).
Result for the period was EUR -33.3 million (EUR -59.3 million). Earnings per share were EUR -0.50 (EUR -0.82).
Stockmann expects the group’s revenue for 2016 to be down on 2015 due to ongoing strategic actions in order to improve profitability. The adjusted operating result is expected to be slightly positive in 2016.
Interim CEO Lauri Veijalainen said: "Our strategy work focusing on core strengths is proceeding well and Stockmann signed an agreement in April to sell the Hobby Hall business to the SGN Group. The business will be transferred to the new owner at the beginning of 2017.
"All major structural changes in the non-core units have been made, and we will concentrate fully on our core businesses, Stockmann Retail, Real Estate and Lindex."
Stockmann’s target is to considerably flatten its organisational structure, eliminate overlaps and simplify its processes.
A new lean organisation, that will adjust the number of Stockmann’s employees in line with the scope of current operations, was discussed with the personnel during the codetermination negotiations which started in June and were concluded at the beginning of August.
As a result, approximately 300 positions will be ended, most of them through lay-offs. In addition, around 80 people from the support functions will be offered a new position as a sales assistant and around 60 people are offered a position in the support functions with new employment conditions.
The number of department store sales assistants will not be reduced to ensure excellent customer service. The final number of reductions will be confirmed when all the personal discussions have been carried out.
At the start of the negotiations, which concerned around 3,000 persons, the reduction need was estimated to be about 380 employees.
The goal is annual cost savings of approximately EUR 20 million, which will be achieved during 2017. A provision of EUR 5.8 million related to these organisational restructuring measures was booked in the second quarter. ■