It’s now easier to detach from the retail business than before, especially when the buyer can offer industrial synergies as support. Such as procurements, systems, administration, etc. And a vision on how to manage and develop department store operations better and more efficiently.
Of course, it’s good to remember that the operating result in the image below has been adjusted, and those IFRS lease procedures probably come only after that.
Naulapää in a Hesari interview, with the certainty of a chief legal officer.
According to Naulapää, the end of the restructuring process simplifies the company’s opportunities to make decisions regarding Stockmann’s department store business. This concerns the ongoing so-called strategic assessment, which HS reported earlier on Monday.
Making decisions would, of course, have been possible even during the restructuring process, but now that the restructuring has been completed, the company no longer needs to seek the approval of the restructuring supervisor for its decisions.
In what way has the restructuring program complicated the strategic assessment?
“It would have limited the management’s and board’s ability to act in various arrangements and structures,” Naulapää says.
Lindex Group has promised to announce the results of the strategic assessment by the end of June. Naulapää does not yet want to comment on whether the results of the assessment will be obtained by then or if the completion of the assessment will be delayed.
“We will certainly announce something about the matter by the end of June,” Naulapää says.
Why did you suddenly decide to settle the matter instead of a legal battle?
“This has been a long process. Now the time was ripe for an agreement,” Naulapää says.
Legal disputes | Lindex settled the dispute, urgency to resolve Stockmann’s sale – share price up over 10 percent
Apologies for the low added value of this message, but Finally! I had a premonition, as I was just thinking at lunch that there are only a couple of weeks left until they should announce the strategic assessment, wondering if something was brewing as we’re nearing the finish line, and that bigger projects are usually nice to wrap up before summer holidays. I even checked the stock chart after several weeks, hoping it would predict something, but it still looked dead at lunchtime 
(and only now did I notice the announcement).
I’ve been sitting on these Lindex shares for a long time, waiting for something to happen. Now, the rest of the year will be very interesting for shareholders.
There are now many potential positive drivers that can provide momentum. This is indeed a ridiculously large position in my portfolio, but now we just (still) sit and wait for its value to be unleashed 
(By the way, it seems over a year has passed since my last post, and I don’t think I’ve visited the forum in six months, but this news was definitely worth it! Good luck and patience to all fellow investors who are still in.)
It also occurred to me, as irresponsible speculation of course, that if the Swiss were genuinely involved solely and exclusively because of Lindex, then Stockmann could end up either immediately directly or at a later stage solely owned by Kontsamfundet. Or the Swiss are either involved for a while at the beginning, withdraw at some point, or are involved in the joint venture for the so-called longer term/permanently, as is the most common assumption or guess. The purpose of this scenario is merely to open up the perspective that their interest might indeed be only in Lindex, and not in Stockmann – at least not in an ownership form. It is at least clear that Kontsamfundet’s interest is largely (perhaps only?) in Stockmann.
This would not rule out the aforementioned Åhléns consortium either; it would merely mean in this scenario that it had lost.
As stated in Lindex’s 1-3 month interim report, Lindex products have been introduced for sale in one Magasin du Nord store (again, thanks to the sharp-eyed writer on the investment information forum for this). In light of this information, it would be difficult to believe that the Swiss were solely and exclusively after Stockmann, or involved merely because of Stockmann, and had joined for that reason.
I believe that if this were the party that won the “tender” instead of the Åhléns consortium, the Swiss would make arrangements with Kontsamfundet – sooner or later. I myself would be inclined to believe that the Swiss would rather buy Lindex than Stockmann, and I think this will happen at some point. Of course, it would almost be conditional on Stockmann being sold or its fate otherwise receiving some kind of seal. What connects them to Stockmann is, of course, that particular joint venture and co-ownership, but I see them only as supporters and additional shoulders for Kontsamfundet. Of course, their comments could indeed be mere rhetoric.
The sale of Stockmann, even to Kontsamfundet, would naturally be in their interests, to which all comments from the respective parties refer. It might also have been one condition for Kontsamfundet to get them involved. A condition that they might buy Stockmann, whereupon the Swiss agreed to invest in Lindex, as well as the Lindex Group.
Would the Swiss have joined if they hadn’t known that Stockmann definitely had a buyer / they would buy Stockmann in the name of the joint venture (and be involved for at least some time)? I don’t believe so. Nor would it be the end of the world for them in this case if Stockmann were sold to the Åhléns consortium instead of Nordic retail partners / Kontsamfundet.
Of course, there is also the possibility here, as before, that the buyer or buyers have all failed/withdrawn, and there is no buyer for some reason after all, and the assumptions no longer apply, or the conditions have changed, or anything else. Things can and have changed many times over the past almost two years, and there is still a possibility that the sale of Stockmann might not happen at all. However, in my opinion, the possibility of a sale significantly increased today compared to the time before the aforementioned announcement.
Reasoned speculation is the salt of this forum - thanks to @Ozzo, @mrbeast and @Latela.
However, I believe that only national-historical romanticism about preserving history could be the basis for a co-op’s enthusiasm for investing in Stockmann. While a co-op certainly has its own ideological angle on commercial national history, the S Group has been increasingly business-driven in the long run. Therefore, it would be difficult to justify:
Stockmann’s most likely future might indeed be a “village store” in the center of Helsinki. Old traditions, a tourist destination, and a niche store for Helsinki’s small, wealthy linguistic minority. In other words, a slightly more urban, cooler, and more historical version of Tuuri Village Store. 100M and 5% bottom line. I would be surprised if the S Group were to engage in this game.
The buyer of Retail (Stockmann) needs a boost in results behind it, i.e., industrial synergy: P&C, Ahlens, etc. have it, Konstsamfundet practically does not (or the foundation’s purpose is completely different).
Now that boost and money comes from within the Lindex Group, i.e., from within the Lindex chain.
Just detaching Retail would require significant capital…
But, P&C could very well say that the Lindex chain is of interest, and the chain has already improved and generated profit for them.
Still, P&C is strongly a department store chain with no operations in Finland, i.e., an opportunity to expand if desired.
I’m not really going to challenge this comment any further, but…
Stockmann’s loss of competitiveness is due to the company’s decisions (or lack thereof) in a rapidly developing market. Investing in e-commerce, etc. Is it fair to say that a buyer (whoever it may be) would not strive to develop the department store business to meet current standards in clothing and other retail?
In my opinion, business development is a prerequisite for a successful acquisition, especially when buying a ‘ruin’ like Stockmann. The current deficit is indeed very long, no one would deny that, but I believe and hope that the new owner will specifically aim to meet the changing demands of retail and develop the concept and business so that Stockmann can become profitable again, even as part of a larger chain. Otherwise, the acquisition would be value-destroying for the owner.
Remaining a Helsinki village shop would be a sad outcome for Stockmann, and in my opinion, it is even the most value-destroying option, when speaking solely of Stockmann’s business in anyone’s hands.
Stockmann has focused on cutting fixed costs over the last decade. The only problem is that the gross margin has come down just as quickly. In the long run, sales and gross margin must be increased to survive. For a few stores, sales would already be so low that fixed costs cannot be covered.
I kept thinking about this, and at least from the interview Barst gave to HBL in January 2023, one gets a different picture. Of course, the journalist might have steered the conversation towards department stores, and at that time the group’s name was still Stockmann, so it’s not always clear whether it refers to the department stores or the group. In any case, that practically only talks about department stores. Generally, JC Holding and Konstsamfundet spoke about developing both chains. So, to me, it sounds like either that recent comment is a smokescreen or the ideas have evolved along the way.
This doesn’t really matter, as I believe the department store operations can be pushed out of the group, even if the main owner doesn’t want to buy them.
It feels like over the years, one or another of their comments has been a smokescreen I strongly suspect that at least the investment was not centered on gaining experience in Lindex’s underwear and children’s clothing segment, even though Barst writes this
Sometimes I got the impression that they were genuinely interested in the iconic property in the heart of Helsinki. A couple of floors would be enough for Stockmann, and the upper floors could be utilized for entirely different purposes because the upper floors only generate losses. A bit like how they were interested in the Magasin du Nord property. The difference here, of course, is that Keva managed to buy the property for 400 million in 2022.
Let’s throw out a wild speculation, as there has been all sorts of speculation going around. What if they bought Lindex and Stockmann, but the deal included the property owned by Keva? 
Considering that JC/KSF board representative Björkman was absent from several board meetings last year due to “conflict of interest/recusal,” it’s unlikely they were discussing the company’s advertising budget and how much of it goes to Höblä; something a bit bigger is behind it.
So, JC/KSF is almost certainly the primary buyer, and the board has discussed purchase prices, other offers, etc., in which case board members playing both sides of the table cannot participate in the meetings.
My guess is that this entire winter and spring have been spent negotiating an amicable settlement with LT, and as part of that, what is agreed upon regarding the continuation of the Tapiola department store, which is certainly essential information for potential buyer candidates. Now that the dispute has been settled, the path is open for the actual sale.
EDIT: To clarify further, I wouldn’t be surprised at all if JC/KSF were involved in negotiating with LT regarding Tapiola’s future, and the outcome of these negotiations affects the terms under which the retail business is sold, or alternatively, JC/KSF have demanded a negotiation outcome favorable to them in order to proceed with buying the retail business.
It could also be that the negotiation outcome with LT does not please JC/KSF, and now they need to find another buyer.
Since there was even money to be accounted for from the reservation made, one could imagine that Tapiola department store would continue in at least some form. Earlier, 1/4 of the floor went to Herkku, also for S-Group’s use.
It’s hard to say whether
Let’s see…
The waiting time is long, but now a certain milestone has been reached.
Because irresponsible speculation is fun entertainment…
I would guess that LT/Ainoa would at least want to propose space modifications in negotiations so that they can get higher-paying tenants for prime locations. On the 1st and 2nd floors, there is now an empty corner behind Stockmann and Lindex/Akateeminen, in the place of the former two-story Nordea office which was accessed from outside. Difficult space to rent. Perhaps expanding there (read: moving home and children’s departments there) would enable the department store to be condensed into two floors and, correspondingly, free up the top floor for restaurants, for example.
This news should also be taken into account when speculating about possible premises solutions for Ainoa:
In the press release, I pay attention to the mention that Lidl will open by 2027 at the latest. So, for one reason or another, the exact opening date for Lidl was apparently not yet known last February.
Looking at the current floor plan of Ainoa, I would guess that none of the current retail spaces on the M-floor (excluding the current grocery stores) are 1600 square meters themselves? I found an old news article on Google stating that, for example, the sales area of the Clas Ohlson (Klasun) space would be 818 square meters:
So I would guess that space changes would occur, and these might also mean other changes on some other floor/floors. What does this then potentially mean for Stockmann (Stockan) and Lindex, or does it mean anything? Hard to say, as there is no information. One can always guess, of course.
That compensation sum is indeed interesting. If it really happened that in the settlement less is paid than the previously made provision, i.e., less than was ordered in the VMK decision, then either some horse-trading has been done regarding the Tapiola department store contract, or LT has for one reason or another concluded that they have a weak hand in the legal cases.
I really can’t believe the latter, because earlier in the spring, information came out that LT was seeking more than that VMK decision sum, or in other words, this couldn’t be gotten rid of just by paying that 16M or so that VMK ordered. Now, however, the settlement came in below that sum, which to me indicates that something else has been agreed upon at the same time.
Well, there are still 3 weeks left of this month, so perhaps we will indeed hear more about the matter.
Good point. I think LT has had to balance here between profits and, on the other hand, the symbolic significance of the anchor tenant. In Ainoa, there is no Citymarket or Prisma as an anchor; there is Stocka, which, despite all changes, is still important for the purchasing power and loyalty card-swiping customer base of Greater Tapiola and, more broadly, Southern Espoo - and thus affects the entire shopping center’s prospects and profile.
If I may continue the S Group speculation a bit, Finns have had difficulties in recent years paying Stockmann’s prices because the loyalty program is quite thin and online shopping offers alternatives. The green S-Bonus Card combined with Stockmann’s selection and price level could attract them to those multi-hundred-euro purchases, from which bonuses accumulate. And for Finns, the green S-Bonus Card is now a really strong draw, regardless of location.
And of course, Sokos already exists, but objectively speaking, it’s not a match for Stockmann, at least not in Helsinki.
It would indeed be a patriotic act if Lindex were sold for 500 million now. That would support Stockmann’s operations for many years, and loyal customers would be jumping for joy. And dividends too… Just a small question mark, though, whether someone would buy Lindex for 500 million. That is, after all, its current market value. I wonder a bit why the share value would rise a lot (as is being gloated about here) if Stockmann were sold off?
There’s always a place for Stockmann, especially in the center of Helsinki. It’s the only department store where you can find several quality brands under one roof. Is there any data available on how well that particular Stockmann in the city center is doing? There are always people there, especially tourists in the summer. At LV, a queue of Chinese people is certain. At Christmas, it’s good if you can even fit in. I always wonder what’s going wrong with the results when there are so many people.
I would at least buy it!
Didn’t Lindex make something like ~80M€ operating profit last year as well (it was still a bad year), so EV/EBIT is around 6 (I couldn’t be bothered to calculate what’s left after that). You could almost quickly put a one in front of that multiplier once we get rid of Stockmann.
It would be a patriotic act if Lindex were sold for 500 million now. That would support Stockmann’s operations for many years, and loyal customers would jump for joy. Dividends too…
This was hopefully sarcasm? This is what has been done for years now, i.e., pumping money earned by Lindex into a bottomless pit called Stockmann. In my opinion, quite a few millions could even be paid if someone just agrees to take this.