Department store Stockmann announced on Tuesday that it will start redundancy talks to cut 160 jobs within its operations.
The beleaguered department store chain said that it needed to embark on a business reorganisation and cost reduction programme to return to profitability.
The company, which currently employs 1,600 people in Finland, aims to reduce operating costs by 40 million euros by spring 2021. Personnel cuts will account for less than one-third of the target, with more than two-thirds coming from other cost-cutting measures, says Stockmann. The number of sales clerks will not be reduced in the negotiations.
Operating losses decrease year-on-year
For the first quarter of 2019, Stockmann's losses were less than for the same quarter in 2018. For January-March 2019, adjusted operating shortfall stood at 20.6 million euros, whereas for the previous year they stood at 24.8 million euros.
According to Stockmann's executive chairman Lauri Ratia,adjusted the operating deficit decreased during the first quarter of 2019 owing to the positive performance of the Lindex clothing chain in Finland which is owned by Stockmann and the department store's Hullut Päivät (Crazy Days) sales campaign.
Stockmann also announced that it would be merging its retail unit -- the department store business -- with the department store properties business unit. The company’s third unit is the fashion chain Lindex.
Last Thursday Stockmann issued a profit warning. The retailer rescinded its earlier prediction of improved profits for this year, now saying that results will be poorer than expected.