Stockmann, the parent company of Lindex, has seen an improvement in its performance during the third quarter of the year. Despite facing challenges from the ongoing pandemic, the company reported a better-than-expected gross margin and operating profit. However, concerns about a potential second wave of COVID-19 impacting the fourth quarter loom large.
In the July to September period, Lindex’s revenue fell by 6.8% currency-neutral to €207.6 million. Despite this, the company noted a positive shift in its gross margin, which rose to 57.4% from 56.4%. The operating profit also saw a significant increase, reaching €11.7 million compared to €2.1 million in the previous year.
Looking at the year-to-date results, Lindex reported a 16.1% decrease in revenue to €558.7 million over the first nine months of the year. The margin also decreased to 55.3% from 56.2%, with an operating loss of €21.9 million. The challenges faced earlier in the year due to the pandemic and subsequent lockdowns in Europe were particularly tough for the company.
Despite improvements in visitor trends in physical stores during the third quarter, the resurgence of the pandemic towards the end of the period once again impacted business operations. While digital sales saw growth, the overall decline in sales was mainly attributed to the ongoing impact of the coronavirus.
CEO Jari Latvanen expressed concerns about the uncertainty surrounding the fourth quarter and predicted lower revenue for the year 2020 compared to the previous year, leading to a loss-making operating result. Despite these challenges, he commended the strong performance of both the Lindex and Stockmann divisions, highlighting enhanced sales activities and cost efficiency measures as key drivers of success.
Lindex’s focus on digital expansion has been a core strategy, with recent initiatives including launching on Zalando and partnering with the new underwear brand Closely. Additionally, the company has been exploring new business models and sustainability efforts, such as second-hand sales of kids’ outerwear in selected stores.
Stockmann has also been revamping its business strategy, with a focus on customer relationships, omnichannel experiences, and profitability in selected categories. The division continues to update its department stores, enhance its premium offerings, and introduce new collections for its own brands to adapt to changing consumer behavior and market conditions.
As the company navigates through these uncertain times, its commitment to innovation and adaptability will be crucial in ensuring long-term success in the ever-evolving retail landscape.
For more information on Stockmann and Lindex, visit their official websites:
Stockmann
Lindex
