Stockmann: Affordable fashion market to improve in autumn

16 Aug '12

4 min read

The unstable state of the world economy and the unresolved European debt crisis create a challenging basis for assessing the future outlook, especially the long-term retail market development. There are indications of weakening consumer behaviour in particular in Finland where consumers’ confidence in their own economy has declined.

The Russian market is likely to continue to perform better than the Nordic countries, provided mainly that the price of oil does not drop significantly from its current level. The growth of consumer markets in the Baltic countries is expected to continue. However, high uncertainty and weakening consumers’ confidence may continue to affect consumers’ willingness to purchase in all markets.

The market for affordable fashion developed poorly in 2011, particularly in Sweden. The slow performance continued in the first half of 2012. The market is expected to improve in the autumn, compared with the weak second half of 2011.

Stockmann’s decision to discontinue the loss-making Bestseller franchising operation during 2012 will have a minor impact on revenue in Russia, but will improve operating profit from 2013 onwards. Stockmann’s target is to achieve a positive operating profit, excluding Bestseller operations, in Russia in 2012.

During 2012, Stockmann will concentrate on gaining the full benefit of its recently completed capital expenditure projects as well as on the efficient use of capital. Additionally, attention will be given to improving cost efficiency in all units. The Group’s capital expenditure is estimated to be clearly lower than depreciation, and to amount to approximately EUR 50 million in 2012.

Stockmann expects the Group’s revenue and operating profit to be above the figures for 2011, provided that the market sentiment does not significantly worsen.

Stockmann

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