Struggling retailer Stockmann Group is to sell off its flagship department store in Helsinki as well as other properties, the firm announced on Monday as it revealed its restructuring strategy.
The firm said it is also planning to sell its stores in Tallinn, Estonia and Riga, Latvia, noting that it would continue operations as a tenant in the sold-off properties, as well as online.
Proceeds from the sales of the properties will be used to pay debts, the firm said in a stock exchange announcement, noting that its liabilities amounted to nearly 740 million euros.
The department store chain was established in 1862 but, like many retailers of its kind, has struggled in recent years. Then, the burgeoning effects of the coronavirus pandemic prompted the firm to file for corporate restructuring at Helsinki District Court last spring.
The company faced a deadline to submit its restructuring proposal last Friday but its release was postponed until Monday.
Stockmann said it has negotiated new lease agreements for its outlets in Vantaa, Turku, Tampere and Espoo as well as its offices in Helsinki and noted that talks regarding its store at the ITIS shopping centre in Helsinki were still ongoing.
The firm's CEO, Jari Latvanen, said he believed that the restructuring plan would help the company "to achieve the best possible outcome for all parties involved."
"Together with the other measures that have already been taken – such as adjusting cost levels, adopting a new business strategy, rationalising processes and implementing several other operative measures – the restructuring will ensure that Stockmann has a future as a pioneer in the fields of fashion, home goods and beauty products. The restructuring programme will also enable Stockmann to make the investments planned for 2021–2028, which are necessary for the development of the company," Latvanen said in the company announcement.
The firm said it would retain ownership of its chain of fashion stores Lindex, noting that revenues would go toward paying off its debts.