Stockmann, the renowned Finnish retail giant, experienced a challenging second quarter as the ongoing COVID-19 pandemic led to significant operating losses in both its department stores and subsidiary Lindex. The company reported an operating loss of €3.1 million for Lindex, a sharp decline from the €10.2 million profit generated during the same period in the previous year. Revenues also took a hit, dropping from €242.3 million to €182.7 million, with the gross margin decreasing from 58.6% to 54.1%.
Despite the adverse effects of the pandemic, Stockmann’s CEO, Jari Latvanen, emphasized the proactive measures taken by the company to mitigate the impact. With swift adjustments implemented in both Lindex and Stockmann, coupled with cost-saving initiatives from the previous year, the group managed to reduce fixed costs by approximately €35 million compared to the prior year. A new restructuring program is currently in the works and is set to be unveiled in December.
The company demonstrated resilience in the face of store closures and restrictions, witnessing an uptick in customer footfall at Stockmann and Lindex outlets following the relaxation of coronavirus measures in late May. Online sales also showed robust growth in both divisions throughout the second quarter and the first half of the year.
In response to the challenges posed by the pandemic, Stockmann transitioned its primary spring campaign exclusively online and introduced new services tailored to adhere to COVID-19 restrictions. The company achieved significant cost savings through measures like furloughs, ensuring operational efficiency during uncertain times.
Although the effects of the pandemic were felt across Stockmann’s stores in the Baltic countries and the Lindex chain, the company remains optimistic after adjusting its strategies to navigate the crisis and subsequent lockdowns. Both divisions reported an increase in online sales, with Stockmann launching new brands and fulfilling more orders through its online store. Lindex’s online sales soared by a remarkable 102% during the quarter.
Stockmann’s strategic focus on efficiency, cost management, and the acceleration of online sales bode well for its resilience in the face of COVID-19 challenges. The return of customers to physical stores signals a positive trajectory for the retail giant in the foreseeable future.
For more information on Stockmann and its latest developments, visit their official website here. Additionally, to explore the latest trends in the retail industry amidst the COVID-19 pandemic, check out this insightful article here.
