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Stockmann sets up new operating model focusing on sales

June 03, 2014 (Finland)

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.
 

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