SWEDEN: Lindex Cost Cuts Include Redundancies And Closures
Retail chain Lindex, which has stores in the Nordic market and in Germany, has announced a number of redundancies and store closures in an attempt to bring the business back to profitability.
Short-term cost saving measures include a reduction of around 50 positions, mainly at the head office in Alingsas, and the shutting down of between five and 10 stores in its network. A continued reduction in expenses, partly through lower storage and transportation costs, fewer development projects, more efficient marketing and a reduction in the number of consultants is also planned.
In addition to these cost savings the company has introduced a comprehensive change in its organisation and working methods. The surplus autumn inventories have been phased out and Lindex's expenses have been reduced. The purchasing volumes for the coming seasons have also been adapted, and this is expected to make a full impact during the fourth quarter of the current year.
In total, these measures should generate an annual profit contribution of SEK100m within six to nine months. The structural costs for store closures and other changes are expected to amount to SEK30-40m in the current financial year.
The project will also include a more strategic phase in which Lindex's business processes, organisation and working methods will be analysed. The aim is to develop further the Lindex concept into a competitive and profitable international retail business. The result of this work will be announced during the autumn.
A separate German organisation is being established to speed up improvements in the German operations. New solutions and concepts will be tested in a number of pilot stores, and successful changes implemented throughout Lindex's store network.
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