Moscow. November 27. Finnish Stockmann Group (controls clothing stores Lindex, Seppala and Department stores Stockmann) signed an agreement to sell its stores in Russia Reviva Holdings Limited, the owner of LLC “Debrass”, the Russian franchisee of Debenhams Department stores.
It is assumed that Reviva Holdings will acquire 100% of shares of JSC “Stockmann” for 5 million euros, the transaction will be cash, the report said Stockmann. It is planned to close until 31 January 2016, before that company must obtain permission from the Federal Antimonopoly service of Russia.
Seven Russian Department store Stockmann will come under the control of Reviva Holdings in February. The company will have the right to use the brand Stockmann in Russia for two years after the closing of the transaction. During this time, Reviva will put the stores under the Debenhams brand.
After the sale of Russian Department stores, Stockmann will concentrate on estate management and will remain the owner of the shopping Mall “Nevsky” in St. Petersburg.
The decision to sell the Department stores in Russia, the company explained their unprofitability. “The Russian Department stores were unprofitable last few years, and a strong devaluation of the ruble increased the losses. Stockmann aims to return to profitability and therefore took the decision to sell these assets,” said CEO Per Thelin, Stockmann, whose words are reported.
Network Stockmann group includes seven stores (five in Moscow, one in St. Petersburg and Yekaterinburg), and the outlet and a logistics centre. It is assumed that 2.3 thousand employees of JSC “Stockmann” will continue to work in the company after its transition to the new owner.
Stockmann Group Stockmann operates Department stores, mono-brand clothing stores Lindex and Seppala. The company was founded in 1862, it now operates in 16 countries, including Russia (since 1989).
In February of this year Stockmann announced plans to close three loss-making Department store in Moscow by the end of 2016 in the framework of optimization of business. It was about three shops located in shopping centres “Mega”. In addition, in connection with risks in the Russian retail market, the company was going to close the Lindex monobrand stores in Russia. The closure of the remaining stores planned for the summer of 2016, the company said on Friday.
Last year, the Stockmann group also announced that 2016 will close stores in Russia Seppala.
The Stockmann Group’s revenue in Russia in 2014 decreased by 17% to € 286,9 million of 345.7 million euros in 2013. Operating loss of the company in Russia last year increased to 28.7 million euros, from 6.4 million euros in 2013.
In the report for the third quarter of 2015, the company noted the unstable situation on the Russian market as a whole, the decline in purchasing power and a weak ruble. Due to the adverse impact of exchange rate differences gross margin of Stockmann in Russia declined, the company said, without specifying the dynamics. Sanctions against Russia and counter-sanctions continue to weigh on the economy.
For the first nine months of 2015 revenue of Stockmann’s Russian business declined by 29% to EUR 145,6 million. Operating loss amounted to 27.9 million euros.