STRONG PERFORMANCE CONTINUED DESPITE CHALLENGING BUSINESS ENVIRONMENT
The Stockmann Group’s performance in 2022 was very good despite a challenging operating environment. Revenue for the year grew by over 9 per cent, coming to EUR 981.7 million. The adjusted operating result increased to EUR 79.8 million (68.3) thanks to sales growth and effective cost control. The revenue growth was reflected in our divisions’ results. Lindex’s sales exceeded SEK 7 billion and it achieved its best-ever operating result. The Stockmann division had solid revenue growth and the adjusted operating result improved significantly. The return of customers to stores after the pandemic was a welcome development. We improved performance in a very competitive retail landscape by focusing on quality, service and selection. The good work paid off.
Our achievements also include positive cash flow, repayment of the undisputed restructuring debt and the decision to improve Lindex’s logistics efficiency by investing EUR 110 million in an omnichannel distribution centre over the next three years.
Lindex continued to develop its store network and international distribution channels and introduced a customer loyalty application to supplement the digital customer experience in its countries of operation. Lindex renewed its collections and expanded its selection and size ranges.
The early part of the year was overshadowed by the COVID-19 pandemic and Russia’s invasion of Ukraine. Consumer purchasing power was weakened by a rise in the cost of living stemming from the economic impact of the pandemic, accelerating inflation and rising energy prices. The war and the pandemic also put a strain on global supply chains and logistics. To protest the war of aggression and show our support for Ukraine, we stopped selling Russian and Belarusian products and exporting goods to Russia.
Despite the challenges, we continued implementing both of our divisions’ strategies. We updated our online platforms and brick-and-mortar stores, reinforced our market presence and developed our offering and services. The Lindex division gained a million new registered customers and launched the Female Engineering products. Entry into this new and significant market is important to Lindex’s growth strategy. The Stockmann division gained over 82 000 new loyalty programme customers and made good progress in customer experience. We used our loyal customer data and insight even more efficiently and increased revenue in this important segment.
After successfully completing our restructuring engagements, we continued to focus developing our business. We boosted media revenues by using our brick-and-mortar stores and digital channels as advertising platforms for partners. We also launched a project to develop Stockmann department stores into spaces offering a wide variety of services, community aspects and experiences in addition to shopping. We invested in the implementation of our sustainability programmes and in circular economy services, such as textile recycling and reuse, for which there is increasing customer demand. However, we still need to improve our understanding of the earnings logic of circular business models.
We expect the business environment to remain challenging at least for the first half of 2023 due to geopolitical instability, inflation and weakened consumer confidence. The year may turn out to be more favourable than we expect, but we have prepared for it on the basis of a cautious scenario. In our strategy implementation we focus on growth, cost efficiency and the efficient use of capital. Our key growth focuses are developing a holistic customer experience, partnerships to expand our range of goods and services relevant to customers, digital and multichannel retail trade, circular business solutions, and retail media sales.
I’d like to thank our dedicated employees for their productive work in 2022, our customers for their trust and our shareholders for their patience and support during the challenging restructuring phase.
Stockmann Plc, Chief Executive Officer