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
    }
  }
}


stockmann-lindexs-margin-again-above-expectations

__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.

I can’t judge whether the rent level of the city center department store is normal or high, but I believe it has been noted here before that the city center store is profitable. And while all individual department stores may be profitable on their own, other costs such as administration and division overheads drag the overall result into the red. Department stores and Stockmann have the potential to run a profitable business from a gross margin (44%) perspective. Personally, I feel that a clear challenge in the department store business is the high personnel costs relative to revenue. Department stores require a certain minimum number of sales staff, as they are a central part of the customer experience. This is where department stores differ from many other retail concepts. Last year, Susanne stated in an interview with Arvopaperi magazine that “At Stockmann, our medium-term goal is a five percent operating profit margin, and that is what we are aiming for. But of course, it’s no easy task.” Of course, it would be nice if rents could be lowered, but I suppose that’s just utopian wishful thinking. My own view is that for Stockmann, the savings have already been achieved, and now the focus should be on increasing revenue. It would be interesting to consider how much more revenue Stockmann would need, and from where and how it would come.

I think that from Keva’s perspective, it’s really important to keep Stockmann as a tenant in that property. It’s hard to imagine any other party wanting it, and that wouldn’t be good for Keva.

Quote below from AI regarding the “sale and leaseback” of the Stokka property. I wonder if that “rent level” would be renegotiable. What then is the share of other rental spaces used by Stokka? I don’t believe the solution will be found in the rents. Stokka needs to be made profitable one way or another. It has been continuously moving in the right direction. Spinning off Stokka won’t improve profitability. So, resources must still be put into improving profitability. It will be interesting to hear what Director Susanne says about this in connection with Q4. Susanne Q3 Quote The Stockmann division’s revenue was EUR 62.4 (62.9) million and the adjusted operating result improved to EUR -2.6 (-4.5) million. I am very pleased with the Stockmann division’s third-quarter earnings improvement, which was the sixth consecutive improvement. The Stockmann division’s rolling 12-month adjusted operating result, EUR 0.9 million, was also the division’s first positive rolling 12-month result in many years. The team’s hard work to advance Stockmann’s strategic goals yielded results, as operational efficiency and cost-efficiency measures improved the division’s profitability. AI: Briefly: Stockmann sold its Helsinki city center department store property (Aleksanterinkatu) to the pension insurer Keva in 2022 and continues its operations in the property under a long-term leaseback agreement. Roschier +1  Rent level information The actual rent level (internal euro-denominated rent) has not been publicly disclosed in press releases or the media – the exact rent level of the agreement between Stockmann and Keva in euros per square meter / per year or as total rent has not been publicly released. However, the estimated net yield of approximately 4.2% associated with the transaction provides an indication of rent levels based on the market: net yield means that annual rental income, net of expenses, relative to the purchase price (≈ €400 M) is approximately 4.2%. Helsinki Times For example, 4.2% * €400 M ≈ €16.8 M in annual net rental yield. This is not the direct rent amount, but it serves as an indicative calculation of the property’s expected return under a market-based agreement.  In practice, the detailed rent amount (€/m²) and all contract terms are usually trade secrets and are only published in the parties’ internal reports or IFRS financial statements, not widely in the media or company announcements. Stockmann has not separately disclosed the euro amount of the rent to the public.

If the problem is specifically the long and expensive lease of the city center department store combined with chronically negative cash flow, could a new restructuring of the Stocka division be a solution, at least in principle? I know it sounds really foolish with the previous restructuring having just ended, but Stocka should be separated into its own subsidiary and a corporate restructuring process initiated for it, because in a corporate restructuring, a company has the right to terminate and renegotiate its leases, among other things. The previous restructuring solved some of the problems but not all of them.

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.

Lindex Group

Stockmann's Q2 result decreased year-on-year, but slightly exceeded our expectations. Lindex margin development continued to be very strong. The company upgraded its earnings guidance already before the Q2 report and we raised our estimate to the top end of the updated guidance range. We still feel the company is modestly valued given the possibility of value creation from the structural arrangements. 

<p>Stockmann's Q2 result decreased year-on-year, but slightly exceeded our expectations. Lindex margin development continued to be very strong. The company upgraded its earnings guidance already before the Q2 report and we raised our estimate to the top end of the updated guidance range. We still feel the company is modestly valued given the possibility of value creation from the structural arrangements. </p> 

Stockmann: Lindex's margin again above expectations

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