Stockmann will sell flagship Helsinki store to pay debts

The company plans to lease back the Helsinki, Tallinn and Riga stores from their new owners and continue operating from the premises.

File picture showing exterior of Stockmann store in Helsinki / Credit: Kenneth Luoto

Finnish retailer Stockmann plans to sell its flagship Helsinki department store, as well as stores in Tallinn and Riga, to pay off some of its debts.

The company then plans to lease the buildings back, and continue operating from them.

It’s part of a restructuring solution submitted to Helsinki District Court on Monday as Stockmann tries to turn around the financial slump its experienced in recent years, and return to profitability.

The money raised by selling the buildings would help to pay debts, some of which will partly be converted to company ownership – meaning creditors will own more than half of the company.

Stockmann has also negotiated new lease agreements for smaller premises in Jumbo shopping centre in Vantaa; and department stores in Turku, Tampere and Tapiola, as well as office space in Pitäjänmäki. Negotiations about the Stockmann store at ITIS in east Helsinki are still ongoing.

“Together with the other measures that have already been taken – such as adjusting cost levels, adopting a new business strategy, rationalising processes and implementing several other operative measures – the restructuring will ensure that Stockmann has a future as a pioneer in the fields of fashion, home goods and beauty products” says CEO Jari Latvanen.

“The restructuring programme will also enable Stockmann to make the investments planned for 2021–2028, which are necessary for the development of the company” he adds.

Stockmann says it’s not planning to make any more job cuts at this time as part of the restructuring, and has recently been able to pay hundreds of small creditors who were owed money up to €5,000 each.