Stockmann - Company Announcement

Stockmann’s cost savings programme is making progress: Department stores will have new operating model and cost saving measures will continue in support functions

Helsinki, Finland, 2014-06-03 07:30 CEST (GLOBE NEWSWIRE) -- STOCKMANN plc,
Company Announcement 3.6.2014 at 8:30 EET 

The codetermination negotiations in Stockmann's department stores that were
launched on 22 April 2014 have been concluded. On the basis of the
negotiations, a new operating model focusing on sales has been established for
the department stores in Finland. In the new model, administration and support
services will be centralised, the number of supervisors will be reduced and
work hours will be focused around the busiest hours of trading. A centralised
customer service centre will be set up to take care of customer services
provided over the telephone and through online channels. The comparable annual
savings target of these changes is around EUR 10 million that will be fully
achieved beginning from 2015. 

The number of personnel reductions will be lower than earlier estimated. It
will be possible to implement a significant share of reductions by converting
full-time contracts into part-time contracts and by reducing the contracted
hours of part-time employees. These correspond to a reduction of 110 man-years.
In addition, the number of jobs at the department stores will be reduced by 180
(or 130 man-years), and around 110 of these will take place through
redundancies and the rest through voluntary resignations and retirements. The
number of customer service personnel in the online stores will not be reduced.
The negotiations covered around 3,200 persons, and at the start of the
negotiations the reduction was estimated to be a maximum of 330 man-years. 

The impact on each employee's employment relationship will become clear by
autumn 2014 when the final number of personnel reductions and redundancies will
also be known. 

Codetermination negotiations will be launched in support functions

Stockmann's cost savings programme to improve profitability will continue. In
addition to the measures announced earlier, the target is to achieve additional
annual savings of EUR 7 million that will be fully achieved beginning from
2015. The efficiency of the support functions and personnel resources, in
particular, will be assessed in order to bring the company's cost structure in
line with the prevailing weak market conditions. 

To achieve the additional savings, Stockmann will launch codetermination
negotiations in most parts of the Department Store Division's support functions
and Corporate Administration in Finland. The negotiations will affect
approximately 1 200 persons. The maximum personnel reduction is estimated at
180 persons. 

The negotiations are expected to be concluded at the earliest at the end of
August 2014. The progress of measures will be reported in the interim reports
and separately if necessary. 

Further information:
Hannu Penttilä, CEO, tel. +358 9 121 5801
Maisa Romanainen, Executive Vice President, Director of the Department Store
Division, 
tel. +358 9 121 5230
Nora Malin, Director, Corporate Communications, tel. +358 9 121 3558

www.stockmanngroup.com


STOCKMANN plc

Hannu Penttilä
CEO


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