Finnish fashion group Stockmann is filing for corporate restructuring after experiencing a “significant” impact from the Covid-19 pandemic.
The group, which owns Swedish fashion chain Lindex, said it has made “continued strong growth” on its online stores since the beginning of March, but that has not been enough to offset a “drastic decline” in customer volumes across its physical stores.
The application for the restructuring proceedings were filed at the Helsinki District Court on 6 April 2020.
“The creditors in question who represent over one fifth of the known creditors of the company, have preliminarily indicated a positive stance to the filing,” the group said.
“As the company’s business remains viable and can be restored to a sound basis, the board of Directors of Stockmann has decided, taking into consideration the company’s financial structure, to file for restructuring proceedings for Stockmann plc. The coronavirus and the restrictions it has caused have, and will continue to have, a significant impact on the company’s customer volumes and cash flow,” the company added.
The group's subsidiaries, which include the Stockmann department stores in the Baltics and Lindex, “are not in scope of the restructuring proceedings”.
Group strategy 'on track' prior to Covid-19 outbreak
Last year, the company launched a renewed strategy and performance improvement programme which included cost-cutting measures which were “visible in the positive adjusted operating result of year 2019”.
The company said this business renewal was on the “right track” before the Covid-19 outbreak.
“We have been working tirelessly and passionately with all our Stockmann and Lindex employees to improve our business performance and to serve our customers in the best possible way. Unfortunately, the coronavirus epidemic has forced us to look for new means of driving Stockmann Group into the future. Our primary goal at the moment is to secure the preconditions of our business and our jobs,” CEO of Stockmann Jari Latvanen said in a statement.
“We are confident that the strategy chosen for Stockmann Group is the right one. We will continue the rapid development of the Lindex brand into a major European fashion house. We will also continue to develop the Stockmann department stores based on our three key principles: unique, high-quality products; best customer service; and new products from the world to Finland and the Baltics. At the same time, we want to be a responsible corporate citizen across our value chain and to restore healthy business operations in the group.”
Photo credit: Lindex, Facebook