• 380 Seppälä jobs to go
  • Q3 operating loss of EUR15m
  • Sales slide 10.9%
Per Thelin will take up the role of CEO on 10 November

Per Thelin will take up the role of CEO on 10 November

Finnish department store retailer Stockmann Group is to cut around 380 jobs at its Seppala fashion chain, as it looks to ramp up efforts to improve group profitability.

Stockmann saw revenues slide 10.9% in its third-quarter to EUR405m (US$510m), compared with EUR454.4m a year earlier. The group's operating loss was EUR15m from a profit of EUR11m in the year ago period, while gross margin improved slightly to 49.6% from 49.5%.

Stockmann said previous plans to improve Seppälä's profitability had not been successful, with losses estimated at around EUR25m in 2014.

As a result, the company has put in place plans to downsize the operations significantly in Finland and Estonia, and to close down the business in Latvia and Lithuania during 2015. The stores in Russia will also be closed during the rest of 2014 and going into next year.

Seppälä currently has 130 stores in Finland, 36 in the Baltic countries and 16 in Russia. Stockmann said, of its 800 employees, around 380 will be affected.

Due to this, Stockmann estimates group's Euro-denominated revenue in 2014 to decline, and reiterated its forecast for full-year core operating profit to be negative.

Chairman of the board Kaj-Gustaf Bergh, said: "We have faced challenges in our operations, and therefore our sales have decreased more than the market. In September in particular, the group's revenue decreased in all divisions and this made a significant contribution to the weak earnings of the quarter."

Separately, the company announced the appointment of Per Thelin as CEO to succeed retiring Hannu Penttila.

Thelin, who will take up the role on 10 November, currently works as consultant and has been a senior advisor for companies such as Atria and Eletrolux Retail. He previously worked as president and CEO of Inflight Service Group from 2010 to 2011, and as CEO of Venue Retail Group from 2006 to 2009.