Finnish retailer Stockmann is selling its flagship department store property in downtown Helsinki to pension provider Keva for 400 million euros, the company announced on Monday.
Stockmann plans to continue its operations at the downtown store, with Keva paying around 391 million euros at the time of the transaction with the remaining sum being taken into account as rent over the next few years.
The transaction is part of the retailer's previously-announced restructuring plans, with Stockmann aiming to use proceeds from the sale towards debt amounting to more than 342 million euros and other unsecured restructuring debt of around 21 million euros.
"We are pleased that we have found a stable and reliable domestic owner for the property. The department store building in Helsinki city centre is iconic and has an excellent location, which facilitated the sale of the property," Jari Latvanen, Stockmann's CEO, said in a statement.
The Stockmann property, located in the heart of Helsinki was designed by Sigurd Frosterus and completed in 1930. The brick building has a total leasable area of around 51,500 square metres, the company said.
160 years of Stockmann
According to Latvanen, the property's ownership change should not be visible to the customer at all, adding that the terms of agreement mean that Stockmann's operations cannot be terminated at the site, even if Keva wished to.
"If both sides abide by the terms, there will be no such problem," Latvanen said.
The CEO added that he thinks the future of brick-and-mortar department stores is brighter now that the Covid crisis is abating, saying that consumers want options and services which are not available in online environments.
"Customers want to get back to department stores. They want social contacts. This store is a great fit for Stockmann's 160th anniversary. Let's see what the next 160 years bring," Latvanen said.
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.
Following news of the property's sale, Stockmann's share prices on the Helsinki Stock Exchange ticked up by 11 percent at around 11am on Monday.