Stockmann, the parent company of Lindex, has reported improved performance in the third quarter of 2020. However, the company anticipates challenges in the fourth quarter due to the second wave of the coronavirus pandemic in Europe.

Lindex, a brand owned by Stockmann, saw a decrease in revenue of 6.8% to €207.6 million in Q3. Despite this decline, the gross margin increased to 57.4% from 56.4%. The company also achieved an operating profit of €11.7 million, compared to €2.1 million in the same period last year.

When looking at the results for the year-to-date, it is clear that Q3 marked a recovery for Lindex. Consolidated revenue for the nine months ending in September decreased by 16.1% to €558.7 million, with the margin dropping to 55.3% from 56.2%. The operating loss for the period was €21.9 million, compared to a loss of €9.1 million in the previous year. These figures reflect the impact of the pandemic and subsequent lockdowns experienced in Europe during the first half of the year.

While Lindex experienced improvement in visitor trends at its physical stores during Q3, the effects of the Covid-19 pandemic began to impact its business towards the end of the period. Despite solid growth in digital sales, the overall sales decline can be attributed to the ongoing pandemic.

Looking ahead, Stockmann acknowledges the significant negative impact of Covid-19 on its operations and expects the fourth quarter to be particularly uncertain due to the current pandemic situation. The company predicts that both revenue and operating results for 2020 will be lower than the previous year.

Despite these challenges, CEO Jari Latvanen remains optimistic about the group’s performance in Q3. He credits the strong results to enhanced sales activities and implemented cost efficiency measures. Latvanen also highlights that the group’s operating profit improved and cash amounted to €132 million during the period.

Stockmann has prioritized its digital operations this year, with Lindex continuing its expansion by launching on Zalando in Q3. The company also introduced a new underwear brand called Closely, in which Lindex has been a partner and investor for the past two years. Additionally, Lindex is testing second-hand sales of kids’ outerwear in select stores as part of its efforts to explore new business models and promote sustainable fashion practices.

In the Stockmann division, the company updated its business strategy to adapt to changes in consumer behavior and the operating environment. This includes a focus on customer relationships and loyalty, developing an omnichannel customer experience, and concentrating on profitable categories such as fashion, beauty, home, food, and beverages. The division also renovated several department stores and expanded its offering with the addition of designer brands. Furthermore, a new natural cosmetics department was opened in the Helsinki flagship store.

Despite the challenges posed by the pandemic, both Stockmann and its subsidiary Lindex are committed to navigating the uncertain market conditions and continuing to effectively serve their customers.

Useful links:
Stockmann website
Lindex website