Stockmann - Company Announcement

Stockmann’s efficiency programme moves forward

Oulu department store will be closed, plan to restructure support functions
initiated 

Helsinki, Finland, 2015-04-14 07:30 CEST (GLOBE NEWSWIRE) -- STOCKMANN plc,
Company Announcement 14.4.2015 at 8:30 EET 

Stockmann has chosen its strategic direction and taken the first steps to
implement it. As an important part of the turnaround, Stockmann launched an
efficiency programme in February 2015 with an annual cost savings target of EUR
50 million. The programme includes various measures to improve profitability
and competitiveness in Stockmann's core businesses. 

Evaluating the size of the store network is an integral part of the efficiency
programme. Negotiations for a new lease agreement for the Oulu department store
were unsuccessful and consequently Stockmann will close down the store in early
2017 at the latest. The decision will affect all employees, currently around
230 people, in the store. Stockmann is also moving forward with the earlier
announced plans and will close down the three loss-making department stores in
the Mega shopping centres in Moscow by the end of 2016. These stores currently
employ around 700 people in total. 

As the next step in its efficiency programme, Stockmann is planning to
restructure its support functions in Finland and in Russia. The aim is to
improve efficiency, e.g. by simplifying and speeding up processes and reducing
manual work, and developing operating practices, in order to better serve the
store operations and respond to customer needs. A significant part of the cost
savings is expected to be reached through personnel reductions which may affect
up to 420 people in support functions in Finland and Russia during 2015 and
2016. 

”Stockmann's support functions in Finland and in Russia are today designed to
serve a larger scale of operations and growth strategies. As we are focusing on
our core businesses, we plan to restructure the support functions to better
reflect the Group's new strategy and the current economic situation”, says CEO
Per Thelin. ”The planned reductions are regrettable but necessary in order to
bring Stockmann back to profit. It is our goal to make the changes in a fair
and responsible way for our employees.” 

Stockmann will negotiate about the planned changes with employee
representatives in accordance with country-specific legal requirements. In
Finland, Stockmann will start codetermination negotiations that will concern
around 1 100 employees in the support functions within Stockmann Retail, Real
Estate and Group Administration. The potential reduction need in Finland is at
most 260 people, mainly through ending of fixed-term contracts and layoffs. The
negotiations do not concern sales personnel in the continuing department
stores. 

Other measures to improve profitability and decrease inventories, such as
focusing on selected product categories, developing cooperation models and
terms with suppliers, optimising the store space, improving IT systems and
establishing a new distribution centre, will continue. Information on the
progress of the efficiency programme will be provided in the company's interim
reports. 

Further information:
Per Thelin, CEO, tel. +358 9 121 5801
Jouko Pitkänen, Director, Stockmann Retail, tel. +358 9 121 3858
Nora Malin, Director, Corporate Communications, tel. +358 9 121 3558

www.stockmanngroup.com


STOCKMANN plc

Per Thelin
CEO


Distribution:
Nasdaq Helsinki
Principal media