Lindex owner Stockmann expects higher profits as both brands improve

By

Sandra Halliday

Published
Jan 16, 2020

When retailers put the words ‘profit warning’ at the start of a press release these days, it’s always bad news. But in the case of Lindex owner Stockmann, it wasn’t.

In fact, the company’s ‘warning’ was actually that its group adjusted operating profit for 2019 was higher than expected.

Based on its preliminary numbers, the Stockmann Group’s figure for the year has been revised upwards “due to good performance in both Stockmann and in Lindex during the last quarter”.

The company had earlier estimated that group adjusted operating profit, excluding Nevsky Centre but including the impact of IFRS 16, would be “on a par with 2018”. But that estimate has now been torn up, although we don’t know how much better the final figure will be as it gave no details.

The company will publish its results on February 13 so we won’t know until then. For now though, we know that Lindex in particular has been improving in recent periods. A few months ago, the company said the chain had seen strong Q3 sales and an improved operating result. Its sales rose in all markets and it continued the rollout of its new e-commerce platform, as well as unveiling a new partnership with Sweden-based fashion retailer Boozt. And it opened its first franchise store in new market Denmark in October with what it said was “record-breaking success”.

It all adds up to an operation that’s on a roll and when the results are released we also hope to hear more about the tantalising statement the company made earlier saying that “the board of directors sees great potential in Lindex, and has therefore decided to investigate strategic alternatives for the company’s ownership”.

But the profits upgrade on Thursday was also interesting because of what it said about the Stockmann operation itself. Stockmann has been more challenged that its sister brand in recent periods, but if it too is improving, it’s a vindication of the firm’s strategy and a piece of welcome news.