contentSlug

type

ContentSlug_ContentQuery

slug

ContentPageContentQuery

content

trendingContent

query ContentSlug_ContentQuery(
  $contentSlug: String!
  $type: [ContentType!]
) {
  ...ContentPageContentQuery_13QmVO
}

fragment CompanyDetails_Content on Content {
  __isContent: __typename
  companies {
    name
    description
    pageUrl
    id
  }
}

fragment ContentBasicInfo on Content {
  __isContent: __typename
  id
  type
  title
  lang
  companies {
    viewerIsFollowing
    id
    name
    pageUrl
  }
  tags {
    viewerIsFollowing
    id
    name
    pageUrl
  }
  ...PublishingDetails
  ...Reactions
}

fragment ContentMetadata on Content {
  __isContent: __typename
  type
  title
  lang
  pageUrl
  alternatePageUrls: translations {
    __typename
    pageUrl
    lang
  }
  imgUrl
  description
  ... on Video {
    liveTime
    videoUrl
  }
  ... on Webcast {
    liveTime
    videoUrl
  }
}

fragment ContentPageContentQuery_13QmVO on Query {
  content(slug: $contentSlug, type: $type) {
    __typename
    id
    type
    title
    isPremium
    lang
    htmlBody
    summary
    companies {
      forum {
        latestPosts {
          ...ForumPosts
        }
      }
      name
      id
      viewerIsFollowing
      pageUrl
      defaultInstrument {
        isin
        id
        marketOpen
        marketClose
        marketplace {
          region
        }
        returns {
          total
        }
      }
    }
    tags {
      viewerIsFollowing
      id
      name
      pageUrl
    }
    createdAt
    ... on Video {
      liveTime
    }
    ... on Webcast {
      liveTime
    }
    slug
    ... on CompanyReport {
      reportUrl
    }
    ... on ThirdPartyCompanyReport {
      reportUrl
    }
    ... on StockExchangeRelease {
      reportUrl
    }
    ...ContentBasicInfo
    ...ContentMetadata
    ...PriceAndRecommendation_Content
    ...CompanyDetails_Content
    ...ReportLink_Content
    ...KeyFigures_Content
  }
  ...TrendingContent_1jQ2Cn
}

fragment ForumPosts on ForumPost {
  text
  likesCount
  url
  author
  postedAt
  authorImgUrl
}

fragment KeyFigures_Content on Content {
  __isContent: __typename
  companies {
    defaultInstrument {
      estimateData {
        modelType
        reportingCurrency
      }
      snapshot {
        transaction {
          date
          actualized {
            year
            quarter
            revenue
            revenueGrowth
            ebitAdjusted
            ebitReported
            ebitda
            enterpriseValue
            epsAdjusted
            dividend
            dividendYield
            sharePrice
          }
          estimates {
            year
            quarter
            revenue
            revenueGrowth
            ebitAdjusted
            ebitReported
            ebitda
            enterpriseValue
            epsAdjusted
            dividend
            dividendYield
            sharePrice
          }
        }
      }
      id
    }
    id
  }
}

fragment PriceAndRecommendation_Content on Content {
  __isContent: __typename
  createdAt
  companies {
    name
    pageUrl
    defaultInstrument {
      priceData {
        tradeCurrency
      }
      snapshot {
        priceData {
          date
          lastPrice
          tradeCurrency
        }
        transaction {
          date
          recommendation
          targetPrice
        }
        prevTransaction {
          recommendation
        }
      }
      id
    }
    id
  }
}

fragment PublishingDetails on Content {
  __isContent: __typename
  createdAt
  publishers {
    name
    imgUrl
  }
  authors {
    __typename
    id
    name
    slug
    imgUrl
    jobTitle
  }
  ... on Video {
    liveTime
  }
  ... on Webcast {
    liveTime
  }
}

fragment Reactions on Content {
  __isContent: __typename
  id
  reactionGroups {
    reactionType
    reactionsCount
    viewerReacted
  }
}

fragment ReportLink_Content on Content {
  __isContent: __typename
  type
  isPremium
  ... on CompanyReport {
    reportUrl
  }
  ... on ThirdPartyCompanyReport {
    reportUrl
  }
  ... on StockExchangeRelease {
    reportUrl
  }
}

fragment TrendingContent_1jQ2Cn on Query {
  trendingContent(type: ARTICLE) {
    __typename
    id
    title
    lang
    pageUrl
    createdAt
    type
    imgUrl
    companies {
      squareLogoUrl
      name
      id
    }
    authors {
      __typename
      imgUrl
      id
    }
    publishers {
      imgUrl
    }
  }
}


lindex-group-swedish-clothing-market-grew-by-5percent-in-may

__typename

title

isPremium

lang

htmlBody

summary

companies

createdAt

publishers

authors

reactionGroups

pageUrl

translations

imgUrl

description

Analyst

Rauli Juva

Lindex Group operates in the retail sector. The Group manages a number of stores in major shopping centres and large commercial premises located throughout the Nordic market. The Group is a retailer of several brands and the range consists of clothing, shoes and related accessories. The company has its headquarters in Helsinki.

Was Stockmann forced, in the context of the real estate sale, to enter into a highly unfavorable sale-and-leaseback agreement that cannot be covered even by sub-leasing, even if the entire department store were leased out in parts to third parties + administrative costs on top? I’ll share a similar story from the recession years on a smaller scale. A certain Real Estate Ltd was in a crisis situation after an attic construction project. A large and prestigious top-floor office space owned by the company had to be sold, but a buyer was hard to find. Eventually, Pension Fund X made an offer and at the same time demanded that the real estate company find tenants for 5 years and guarantee the buyer a 10% rental yield from the date of purchase. The company divided the space and eventually found tenants – the rental income only covered half of the pension fund’s demand. However, by then the economic cycles had time to change, and once they got out of the “lease captivity” – the real estate company was in the clear and, as far as I know, is doing well today. Returning to Stockmann’s department store business – based on the release, one could conclude that Lindex is now in a similar situation. Is the department store’s lease agreement so disadvantageous that bringing the entire business to a profitable level is a major obstacle to selling the business as long as the current lease is in effect? And the future? Stockmann’s brand is based precisely on this property – if the business does not continue in this property, what is left? Liquidating the entire company or turning it into an online store (of which there are plenty)? The landlord will surely find a tenant for other uses, as the property is located in a prime spot in downtown Helsinki. This may be a much more difficult situation than I had previously imagined.

In all fairness, Louis Vuitton has fortunately not had to build the added value of its overall customer experience from next door to Stockmann. But that only highlights the ruthlessness and demanding nature of the competition. E. typo

It seems quite clear that the owner themselves has become a significant constraint on the share price. Due to the nature of the main owners, they have “excessive patience,” “excessive ability to endure losses,” and an “excessively emotional and symbolic relationship” with the ownership. To put it simply: falling in love with history destroys the future. Owning Stockmann has likely cost -€30M over the last 5 years. It is obvious that it would have been worth investing to get rid of this. At the same time, it has become certain that the competitiveness of Stockmann’s current concept is insufficient. They are trying to be in max-high-street-premium locations with large and expensive square footage while simultaneously competing online in brand product sales with small volumes and a high cost structure. Maximum efficiency measures have been taken, while trying to balance them with the Emotional Value Index™. Selection development fails to create enough added value in the overall customer experience to allow for higher margins on brand products—such as the 35% profitability of the competitor next door. Louis Vuitton Suomi Oy - Taloustiedot | Suomen Asiakastieto Oy Correspondingly, they do not know how or dare to seek maximum benefit from maximizing the entire PL (Private Label) value chain, as is done at Lindex. And the organization’s competence is not enough to build a sufficiently monetized price-quality ladder for the combination to work profitably. The Board (and the acting management) has also proven that the location strategy ended up, in a completely amateurish fashion, in the stupidest corner of the matrix: being stuck in long leases in non-optimal locations. Either own for the long term or rent for flexibility; in the middle-ground model, you only surrender competitive advantages to your competitors. In my opinion, the saddest thing about that announcement is that no stance is taken on the development of Stockmann. “The sale isn’t working out, but we would still very much like it to succeed someday.” What kind of board and owner allows this? Perhaps one that fears change? Ok. Shit happens. The sale is not succeeding as things stand. There would still be time this year for a follow-up announcement that would redeem the board’s trust: • We have changed our assessment. We will pay the minimum, but we will get rid of Stockmann and move forward (case KH Group & Indoor). • We have changed our assessment. We will make the Stockmann division competitive radically and quickly—and that requires courage. When will we hear about reforms on the level of: • We will shut down the online store completely. It is only a target for subsidization and reinforces our weak price image. • Uniqueness & quality = Stockmann. That is why we took a loan and bought Herkku back for all department stores. Now we are also adding restaurants there (Case CM Pirkkala). • We will genuinely start focusing on the core business and expand the cosmetics selection to more than triple its size (Case Citymarket Kupittaa & Hannu Aaltonen). • We are building Finland’s largest and most unique clothing selection and will focus primarily on second-hand in the future—where there is quality. The reason to come to Stockmann is to sell your wardrobe. • Others collect data with loyalty programs. To us, data is meaningless, but it is not meaningless that as our loyal customer, you get more credit than from anywhere else. Our customer relationship can withstand credit levels that others fear, but we trust you! • We will stop the Crazy Days (Hullut Päivät) sales. Good ideas are important. But even more important is to kill bad ideas. If the math of Crazy Days actually works, why isn’t it 4x or 12x or 52x times a year? • We will be genuinely exclusive in the future. Therefore, in the future, we will charge you an entrance fee, but in return, you get uniqueness, an incredible level of service, and the best price-quality ratio. (Case: Costco). • Selection vitality is our strategic competitive advantage. In the future, we will curate a selection for you that changes 26 times a year, which is why it’s worth coming twice a month! (Case: Inditex). In short, a summary: Anything else, as long as it’s not this history-strangled, deteriorating, unambitious slow death.

I’m repeating myself a bit, but I don’t think I made myself clear in my previous post. Almost everything that came to light today from the list you provided was already in my “playbook,” and based on the forum discussion, I assumed it was the same for everyone else. Apparently, that wasn’t the case, which surprised me. And the communication really hasn’t inspired confidence for years. Not much changed in that regard today either. Still, perhaps it’s a step in the right direction now that the facts are being spoken out loud.

I don’t think so, as the reaction is usually, and in this case too, largely due to the breach and destruction of trust rather than the actual outcome. Uncertainty is the worst thing in the stock market, as is the inability to model the future (at all, in this case). The market punished the communication and how the whole case has been handled throughout. All things considered—and given that Stockmann will likely remain a loss-making burden on the income statement and balance sheet from now until eternity—I find it very reasonable. In my opinion, Lindex’s communication is the reason for the reaction. Today, Lindex communicated directly and indirectly, either consciously or by revealing that:  The restructuring has not actually been the reason for the prolongation of the strategic review and the last-minute delays time after time. They cannot/are unable/are not allowed to sell Stockmann at a zero or negative price. No one wants to buy Stockmann at a positive price. Lease agreements are a significant obstacle. Lease agreements could not/cannot be renegotiated. No negotiations are currently underway. They did not see and do not believe that Stockmann can be sold or spun off, which is why there is no longer a deadline. Stockmann’s negative cash flow prevents a listing; otherwise, this would clearly have been done and initiated. Stockmann’s Q4 may not have gone as well as hoped, and/or the outlook has deteriorated. The main owner is not buying. The main owner does not want to become a strategic partner in Stockmann.  So now my own thesis has crumbled regarding the last part as well, meaning you can wipe your ass with the main owner’s strategic partnership. Why the board member/JC-man (I don’t remember the name) has recused himself many times last year remains a mystery. Either he has been prevented for other reasons, or JC has been involved in the negotiations somehow. However, in my opinion, bringing Lindex chain products into P&C stores doesn’t make anyone conflicted, so all guesses are as good as any again.

Well then, the can was kicked down the road once again. It wasn’t really a surprise anymore, given it was left to the very last days. First, the negatives.   They didn’t get the matter resolved. If this is because they don’t want to give it away for free or with a bag of cash, I can somehow accept this, assuming there is a vision where retail becomes profitable. This close to Christmas, in addition to Santa Claus, I have a childish faith that the board sees it this way. If, on the other hand, it’s because they wanted too much money in return, then they deserve some major criticism. I don’t believe that, though. In any case, this solution does not increase shareholder value, and we remain waiting in uncertainty, which is reflected in the share price today as well.   Communication. An absolute farce, and the board gets big marks off for this. This central point—that we have concluded that spinning off retail is the best option—could have been communicated two years ago. This was now squeezed out almost by force today, likely because even the board realized how bad this would look if it hadn’t been said. This falls on the Chairman of the Board, and I hope the Chairman draws the necessary conclusions and doesn’t seek another term on the board.   I understand that the matter is complex and that there are restructuring disputes etc. ongoing, but the communication has not gone well at all; it’s actually a textbook example of how shareholder value has been destroyed purely through miserable communication. I suspect the matter will certainly be discussed further at the Annual General Meeting, unless someone pulls an ice-hockey-arena-sized rabbit out of their hat and sells the retail division before the spring meeting. The positive side is that what needed to be said was finally said out loud—or should have been said two years ago—which is that separating retail is best for shareholder value. Now we no longer have to guess whether they want to keep retail as a millstone around their neck. The share price reaction has been surprisingly moderate, although kicking the can was quite likely since the communication was left to the last days. I hope the board digs up a positive surprise for the AGM in the form of a proper dividend; they have the funds and the reason for it, considering the suffering of recent years. With a back-of-the-envelope calculation, we could easily reach a dividend of around €0.5, which could provide positive share price development for the spring.

I would break down the announcement like this:  Lindex wants money for Stockmann – no one wants to buy at zero or a positive price. Combined with the June announcement and “stakeholders,” the company is effectively forced into an either-or situation and, due to the main owner and the Swedish-speaking Finns, can only sell for a positive sum. Lease liabilities make finding a buyer nearly impossible, and they haven’t been successfully renegotiated. With cash flow in the negative, there are no buyers for a positive sum, nor can Stockmann be listed, even though this is clearly what they want.  Regarding general communication, covering tracks, making excuses, wordplay, and additions (“stakeholders”), the company today established its argument that “restructuring has prolonged the process” as a smokescreen, just as I previously suspected and wrote. Inderes ending its coverage also falls into the same category. It was certainly no coincidence, just as I thought. For the total destruction of trust, a -10% drop is even a very reasonable reaction, even positive, not to mention that in practice it is impossible to sell/spin off Stockmann and no timeline was provided anymore. My own fair value for Stockmann is €1.8–2.2. I have been wrong countless times in this case. One factor among others is Lindex’s earnings performance, which is miserable compared to my expectations. The Q3 comparison period was poor, and this year’s result is miserable even when reflected against that. I only incurred losses with the Lindex stock, and I didn’t accept/believe the clear signs of danger/what was coming until early November and a week ago when I sold the rest. My biggest mistake, however, alongside, in addition to, combined with, and above all else, is the irrational exceeding of my risk tolerance and risk-taking.

Lindex Group

The May figures for the Swedish clothing market were published this morning. Sales in May were up 5%, supported as expected by favorable spring/summer weather after a soft April. 

Translation: Original comment published in Finnish on 6/12/2024 at 7:38 am EEST.
<img src="https://content.inderes.se/assets/cbc4c70f-7916-4ed3-a0d7-7df4be4bb367?width=923&amp;height=526" alt="Lindex May">
Source: Svensk Handel *Inderes&#x2019; estimate
The May figures for the Swedish clothing market were published this morning. Sales in May were up 5%, supported as expected by favorable spring/summer weather after a soft April. For the year to date, the increase is 2%.
<h2 align="left">Sweden accounts for more than half of the Lindex chain&#x2019;s sales</h2>
Sweden is Lindex&apos;s largest market and accounts for more than half of the sales of the Lindex chain (but not the whole group which is also called Lindex). Our Q2&apos;24 revenue forecast for the Lindex segment is 4% growth in local currencies. Despite a good May, the April-May evolution is an increase of just over 2%, so the market development in Sweden puts a slight downward pressure on the forecast. The development of SEK and NOK, which together account for around 70% of the Lindex segment&#x2019;s sales, also affects the company&#x2019;s figures. However, the FX impact will clearly decrease this year at current exchange rates and will not be significant in Q2&apos;24.

Lindex Group: Swedish clothing market grew by 5% in May

Sweden accounts for more than half of the Lindex chain’s sales

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