Stockmann - Company Announcement

Weaker outlook for Stockmann for 2013 – cost savings programme initiated to improve profitability

Helsinki, Finland, 2013-04-16 07:15 CEST (GLOBE NEWSWIRE) -- STOCKMANN plc,
Company Announcement 16.4.2013 at 8:15 EET 

The Stockmann Group's revenue was lower than expected in the first quarter of
2013 in particular in Finland where the general retail market has been
exceptionally weak. Stockmann's first-quarter operating result is typically
negative due to normal seasonal variation. This year the operating result in
January-March will be significantly weaker than in the first quarter of 2012
and will amount to approximately EUR -34.5 million (1-3/2012: EUR -16.2
million, 1-3/2011: EUR -29.9 million). 

The Department Store Division's Crazy Days campaign in April achieved a new
sales record. The campaign's revenue was up by 10 per cent with growth in all
market areas: Finland up 7 per cent (incl. online store), Baltics up 8 per cent
and Russia up 16 per cent. Despite the excellent results of the campaign
Stockmann expects the retail market in the Nordic countries to remain weak also
during the rest of 2013. Consumers' purchasing power is not growing, and the
general cost level is estimated to increase. 

As a consequence, Stockmann is launching a cost savings programme that will
lower expenses from summer 2013 onwards. Despite the targeted savings,
Stockmann will revise its profit guidance for the full-year 2013. 

Revised profit guidance for 2013

Stockmann expects the Group's revenue to increase in 2013, excluding the
terminated franchising operations. Operating profit is estimated to not exceed
the figure for 2012. 

Earlier profit guidance for 2013 (Financial Statements Bulletin 13 February
2013): 

Stockmann expects the Group's revenue to increase in 2013, excluding the
terminated franchising operations. Operating profit is expected to be higher
than in 2012. 

Targeting a more efficient cost structure

Stockmann's cost savings programme aims to achieve savings from summer 2013
onwards and to improve the cost structure in the long run. As an immediate
step, co-determination negotiations with the personnel will be started
regarding temporary lay-offs. The proposal is to lay off all personnel in the
Department Store Division in Finland and the Group Administration for 12
working days. The negotiations affect approximately 5 000 people and the target
is to achieve savings of approximately EUR 7 million by summer 2014. The
Department Store Division and the Fashion Chain Division have also begun other
measures which aim to reduce fixed operating expenses by over EUR 10 million in
2013. 

Planning for structural changes across the organisation will be started in the
Department Store Division and the Group Administration, aiming at improving
long-term efficiency in all support functions as well as in the sales
organisations. These changes will result in cost savings from 2014 onwards. The
impact of the structural changes on personnel and savings targets will be
specified in stages, starting from autumn 2013. The Fashion Chain Division will
continue to search for synergies and increase cost-effectiveness according to
its previously announced plan. 

Stockmann's Interim Report for January-March 2013 will be published on Friday
26 April 2013. 

Further information:
Hannu Penttilä, CEO, tel. +358 9 121 5801
Nora Malin, Director, Corporate Communications, tel. +358 9 121 3558

www.stockmanngroup.com


STOCKMANN plc

Hannu Penttilä
CEO


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