Stockmann to bring Swedish fashion chain to Russia
March 24, 2008 - Finland
The Annual General Meeting of Stockmann plc, held in Helsinki on March 18, 2008, adopted the financial statements for the financial year January 1 - December 31, 2007, granted release from liability to the responsible officers and resolved to pay a dividend of EUR 1.35 per share for last year.
The Board of Directors' proposals to the Annual General Meeting were approved without changes. Under a franchising agreement, the Group's sales network will expand to the Middle East.
Managing Director's review
In his review to Stockmann's Annual General Meeting in Helsinki on March 18, 2008, CEO Hannu Penttilä observed that the transfer of the Swedish fashion chain Lindex to Stockmann's ownership through a public tender offer in December was a major acquisition, Finland's second largest last year.
Stockmann's most recent acquisitions were made back in the 1980s, when both Hobby Hall and Seppälä became part of the Group. In the ensuing period organic growth has been achieved both by building out operations in the domestic market and by expanding via these concepts to new market areas. Non-core businesses, however, have been trimmed through measures such as divesting the wholesale business, the Sesto grocery chain and, most recently, the vehicle trade in 2006.
The Lindex transaction will strengthen the Stockman Group's position in many ways. Lindex accounts for a share of about 30 per cent on the Stockmann Group's sales, whereas department store operations make up a good 50 per cent and the aggregate share of Seppälä and Hobby Hall is just under 20 per cent.
With the purchase of Lindex, the Stockmann Group has gained a significant position in the markets of Sweden and Norway, where it has not had operations previously. Lindex has a very large share of the Swedish and Norwegian market and operations there are very profitable. While the Lindex acquisition counterbalances the risk of the Group's eastward expansion, it also opens up new and immediate opportunities for expanding
in the eastern market.
The objective is to start up Lindex's operations in the fast-growing Russian market before the end of this year. This means that Stockmann of Finland will be the player who first brings a Swedish fashion chain to Russia.
The Czech Republic too, where Lindex started operations last autumn, is a new country for the Stockmann Group. Via Lindex's own purchasing offices, China, India, Bangladesh, Pakistan and Turkey also became countries where the Stockmann Group operates.
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