Finnish retailer Stockmann sinks to Q2 loss (updated)

Lindex Oyj

24/07/2020 08:16

(Adds details on online sales, shares)
    By Tarmo Virki
    July 24 (Reuters) - Struggling Finnish retailer Stockmann
 STCBV.HE  swung to a second-quarter operating loss as the
coronavirus outbreak kept customers away from its department
stores, and said it was focused on reducing costs to stave off
bankruptcy.
    In April, Stockmann filed for corporate restructuring, a
form of administration in which a court appointee is charged
with restructuring the company to avoid bankruptcy. urn:newsml:reuters.com:*:nL8N2BU164
    The company said on Friday it made an operating loss of 3.1
million euros ($3.6 million) in April-June, compared with a
profit of 10.2 million euros a year earlier.
    Shares in Stockmann fell 3% to 0.98 euros in early trade.
    "The global coronavirus pandemic has had a profound impact
on our business performance, but this spring's transformation
and efficiency measures have produced results," Chief Executive
Jari Latvanen said in a statement.
    Both of the company's divisions, department stores and
fashion chain Lindex, reported doubling online sales this year,
Latvanen said.
    "Swift adjustment measures in both Lindex and Stockmann,
combined with last year's cost savings programme, reduced the
group's fixed costs by about 35 million euros compared with the
previous year," he added.
    Known for its upmarket department stores, Stockmann has
struggled in recent years in the face of a consumer shift to
online shopping, prompting cost cuts and divestments.    
    "The corporate restructuring of the Stockmann parent company
will make it possible to renegotiate the terms of the lease
agreements, with the aim of achieving a lower cost level,"
Latvanen said.
    Stockmann said it was working on drawing up a draft
restructuring programme, which has to be presented to court by
Dec. 11.
    The company has reported annual net losses since 2013 and at
the end of last year its net debt amounted to 900 million euros.
         
    ($1 = 0.8629 euros)

 (Reporting by Tarmo Virki in Tallinn; Editing by Mark Potter)
 ((tarmo.virki@thomsonreuters.com; +372 564 4562; @virki))