Baltic States – CIS, EU – Baltic States, Legislation, Markets and Companies, Retail

"Our Russian department store business has been unprofitable for the past several years and the significant devaluation of the rouble has deepened our losses. Stockmann is targeting a turnaround in its profitability, and therefore we have decided to withdraw from the entire Russian department store business," CEO of Stockmann Per Thelin said in a press release.

The company said that the exit from Russian department store business enables it to put a stronger focus on developing the department store and online business in Finland and in the Baltic countries. Stockmann at the same time plans to continue real estate development in St. Petersburg.

The revenue of Stockmann's department store business in Russia was approximately 240 million euros with an operating loss of 26 million euros in 2014.

The revenue of Stockmann in the Baltic countries and Central Europe in the first half of this year was 72.2 million euros, down by 5.6% from the same period a year ago. The operating loss in the region comprising the Baltic countries, the Czech Republic, Slovakia, Poland and the UK almost tripled from 2.3 million euros in January-June 2014 to 6.8 million euros this year, it appears from the interim report.

At the beginning of April the group sold the operations of its fashion chain Seppala in Finland and Estonia to the management. In the second quarter, Stockmann booked non-recurring items of –5.5 million euros for the closure of Seppala stores under the group's common costs.

The market environment in the Baltic countries remained relatively stable, though competition is increasing in both Estonia and Latvia, Stockmann said in the interim report.