Under the efficiency programme, we were forced to further reduce staff during 2016. These cost-cutting measures have been hard on our staff but absolutely necessary to ensure our future success, including the profitability of our department store business.

INCREASING SPEED

The measures are already making a visible difference to our result. In 2016, operating costs decreased more than EUR 65 million and helped us to improve Stockmann’s result despite a decline in revenue. It is especially pleasing that for the Group as a whole, our operating result was again positive following two years of heavy losses. Our improved results have reinforced our confidence that we are on the right path. Of the three divisions of the Group, Lindex and Real Estate are solidly profitable but Stockmann Retail, which engages in department and online store operations continued to make a loss. The division’s result, however, was improved by around EUR 20 million. During 2017 we will increase our speed to also turn around the department store operations’ operating result to break-even in 2018.

As a milestone, Stockmann closed its department store in Oulu in January 2016 after 16 years. In the future, Stockmann Retail will focus all of its resources on its eight department stores in Finland and the Baltic countries and the online store that supports them. Real Estate will continue to improve the efficiency of retail space and the value of properties by introducing attractive brands and services. In 2017 we will also boost the expansion of Lindex, our most profitable division, and invest in digital business.

CUSTOMER EXPERIENCE RAISED TO A NEW LEVEL

An excellent customer experience and quality of service have always been Stockmann’s signature qualities. A deeper dialogue with customers is also a goal of Stockmann’s corporate social responsibility strategy. We have invited customers to participate in the development of new services such as our new online store and the new Tapiola department store. Our goal is to ensure that our reforms meet our customers’ needs. We receive a huge amount of feedback from our customers both in the customer contact centre and in our daily encounters with customers in the department stores. During 2016 we introduced new ways to collect, analyse and use customer feedback. An excellent example of this is the tablet our sales staff now use, giving them a quick way to pass on feedback. We have also collected feedback with several customer satisfaction surveys conducted through different channels and exit polls. I would like to take this opportunity to thank our customers for all the feedback and comments that we have received during the year. They help us to further develop our operations and ensure future solutions that better service our customers. The new Tapiola department store, which will open in March, is a concrete example of the cooperation we engage in with our customers.

I also want to thank all of our stakeholders and especially our staff for their perseverance during our transformation. I am grateful to our shareholders, Board of Directors, and partners for all the support and cooperation.

The fact that we have been able to turn the company around and make a positive operating profit is proof that we are on the right path. Our strategic goal for 2017 is to continue to improve profitability and the agile development of our operations. To achieve this, we will need the contribution and success of everyone at Stockmann.