The Stockmann Group’s revenue was down 8.3 per cent on the previous year and amounted to EUR 153.9 million in May 2014. Weak exchange rates of the Russian rouble, Swedish krona and Norwegian krone continued to negatively affect euro-denominated revenue. Revenue at comparable exchange rates was down 4.7 per cent.
The Department Store Division’s revenue was down 9.5 per cent. Revenue decreased by 8.7 per cent in Finland, where the retail market remained very weak. Euro-denominated revenue was down 11.6 per cent in international operations. Revenue was up in the Baltic countries but down in Russia.
The Fashion Chain Division’s revenue decreased by 6.9 per cent; down 11.5 per cent in Finland and 5.8 per cent in international operations. At comparable exchange rates Lindex’s revenue was up by 1.6 per cent. Due to currency effect, however, euro-denominated revenue was down 3.8 per cent. Seppälä’s revenue was down 24.1 per cent. Store closings continued in Russia during April and May.
Revised outlook for 2014
Demand of non-food products has continued to be weaker than expected in the Finnish market during the second quarter of 2014. In addition, the weak Russian rouble continues to have a significant impact on the financial result in the Russian market.
If a considerable change in the market environment will not take place during the second half of the year, Stockmann estimates that the Group’s operating profit in 2014 will be significantly weaker than in 2013.
As announced earlier, Stockmann has begun a process of reviewing and revising the Group’s existing strategy, in order to respond to the rapid changes in the retail market. Stockmann will also continue its cost savings programme. Structural changes are being planned and implemented across the organisation to improve profitability.
Previous profit guidance for 2014 (Interim Report published on 29 April 2014):
Due to the weak currency exchange rates and weaker than expected consumer demand in Russia and Finland, Stockmann estimates that the Group’s euro-denominated revenue in 2014 will decline on 2013. Operating profit is not expected to exceed the figure for 2013.