Lindex was put up for sale a few years ago, and the best offers were probably around 350 million. Of course, it sounds like a small amount, but it would be a bit strange if the price on the stock market were much higher than what anyone would pay for the whole company.
An investor would even sell their mother, but for others, Stokkan’s survival would be more important. Where would even Sinkko go for coffee ..
I don’t know what “a few years ago” refers to, but it’s also good to note that Lindex probably made an operating profit of around ~30M€ even before the pandemic. So it was a bit of a different company back then too 
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And the fact that Stokka is sold doesn’t mean that Stokka would disappear. Stokka’s brand, however (despite everything), is probably still the company’s most valuable asset, so it’s unlikely a new owner would start rebranding it (and it’s unlikely anyone would buy it just for the joy of shutting it down). I would even say that if Stokka has any chance of surviving, it is precisely under the care of a new (foreign) owner who can bring scale and expertise as support.
And the new owners will surely still let Sinkko go for coffee there.
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I’ve also wondered a bit if Lindex’s business is that good. At least nothing particularly special in terms of numbers. Somewhere I recall reading from analysts that without Stockmann, Lindex could be worth 4e/share. How do those wiser than me see this, if Lindex’s numbers are compared to other clothing business companies, is that 4e a realistic estimate🤔
Edit. or is the ‘beef’ here that someone would buy out all of Lindex? An amateur is asking, don’t get worked up 
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Lindex is indeed a quality company and performs well. A really good profit margin, high market share in its own categories, excellent brand recognition, impressive management, a completely new logistics center, etc.
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@Rauli_Juva do you have the latest peer valuation table? I found the table from the 12/2023 extensive report, was there an updated version somewhere?
I’d be interested to see where we stand currently.
If retail is sold for a nominal sum of 1€, then in my understanding, Lindex’s valuation multiples, especially EV/EBIT, are quite reasonable compared to international giants (Inditex, H&M) and also lower than domestic “peers” (Tokmanni, Puuilo etc.). But maybe Rauli can elaborate a bit more?
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Lindex cannot be valued with quite the same multiples as the large and international H&M. Lindex only makes good profit in Sweden.
The stock itself is not expensive if the retail business could be divested for 1 euro, which is still a bit hard to believe, because,
From OP’s analysis:
The department store business has been in difficulties for a long time and its cash flow is negative, which
reflects strongly negatively on the group’s value. Our forecast for the department store business’s
adjusted operating profit in 2025 is -1 million euros, which does not yet fully reflect
the magnitude of the negative cash flow due to IFRS 16. We estimate that approximately 20
million euros of the department store business’s rental costs are reported in interest expenses. Taking this
into account, the operational free cash flow of the department store business, with our 2025 adjusted
operating profit forecast, is over -20 million euros.
We estimate Lindex’s value based on our 2025-2026 earnings forecasts to be approximately 650 million euros, which
corresponds to valuation multiples EV/EBIT ~10x and P/E ~12x (2025-2026 average). We value
group expenses with an EV/EBIT multiple of 10x. With these figures, we arrive at a value of approximately 650 million euros
(4.00 per share), when the department store business is not taken into account. The group’s market value on April 30, 2025,
was approximately 430 million euros, so the implicit value of the department store business in Lindex’s share would be
based on this analysis, a good 200 million euros negative (approximately -1.30 euros per share).
Our estimate for the fair value under the current structure is refined based on our cash flow model
to 2.20 euros (previously 2.30). Our estimate for the potential value of the share without the department store business
remains at 4.00 euros. With a 40/60 weighting of the alternatives, our target price remains at 3.30 euros.
OP’s range is therefore quite wide.
The stock also suffers from the Konecranes syndrome, i.e., whether the normal profit level in the future will be the average of the last 3 years or 10 years. There can be failures in collection purchasing, and inventory can turn into unsaleable, unfashionable clothes, as has happened sometimes in history, though not often.
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Here are Rauli’s comments on Lindex and the Swedish clothing market in May.
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You can find it at the end of every report, but it requires paying a few coins for a premium subscription
EV/EBIT is unfortunately complicated by these lease liabilities, so comparing it is not very easy. But if you paint with a broad brush, Lindex’s EV without lease liabilities is currently practically the same as its market value, i.e., roughly 500 MEUR. For EBIT, we forecast 78 MEUR for this year (which is a somewhat modest level compared to the coming years; back in 2019 when the company was tried to be sold, the result was indeed about 40 MEUR). So that comes out to about 6.5x, which is very low. In our sum-of-the-parts valuation, the Lindex chain is valued at 700 MEUR, which is about EV/EBIT 9x.
Compared to peers, I would rather look at P/E ratios, where the median for peers is as high as 19x for this year. In my reports, I have talked about Lindex chain’s “normalized” net profit being just over 50 MEUR, so if you apply, say, a P/E of 15x to that, we would be at 750-800 MEUR. Below are the P/E ratios of the peers.
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I do have a Premium subscription, thanks for asking 
But thanks for the answer, somehow I completely missed those.
As I understand it, on Lindex’s side, lease liabilities don’t mess things up as badly because they have clearly shorter contracts, meaning the so-called financing component is clearly smaller than at Stockmann.
Apparently, all the cool analysts don’t even deign to look at the P/E ratio but go with fancier metrics (the coolest ones apparently only use DCF), but let’s go with this for now. A “normalized” net profit of 50m is slightly lower than what I expect, but even that shows quite reasonable valuation levels, meaning there is upside potential. I personally believe that in a favorable market without wars and other disruptive factors, Lindex (ex-retail) could achieve a net profit of 70m in 3-5 years, which would already give quite low multiples at the current valuation.
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Even the Lindex segment has almost EUR 300 million in lease liabilities, so that also significantly affects EV calculation. Indeed, the impact on financing costs is much smaller than for the Stockmann segment, meaning EBIT gives a better picture. Comparables can then have very different amounts of lease liabilities relative to each other, which complicates the use of EV in comparable valuations.
I too would gladly be a cool analyst and use EV/EBIT, but in this case, I choose a metric that works better
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You already mentioned it well at an early stage, and as the only one (?) even, about a possible/probable bone of contention concerning the case - which could be confirmed by the lower compensation sum you mentioned in the settlement. I started wondering:
- why would a potential buyer have now agreed to LT’s terms after a long struggle, supported by the aforementioned lower compensation sum, which LT has now accepted
- why would LT have suddenly given in on its terms regarding the premises and lease agreement
- has the buyer or the first chosen candidate withdrawn after all, which is why Lindex would have settled for continuing “as is” in the premises and with the same lease agreement
- or has some other party possibly been chosen and won on LT’s terms, because LT mysteriously agreed to a lower compensation sum and this explains it?
- some other reason, what?
I don’t know if I managed to put my thoughts into a clear enough form again or made my point clear, without rehashing previously written things.
On the Discord side, the aforementioned post was noticed, and its announcement at the latest certainly confirms my wild hypothesis to be completely wrong. I don’t know if I’m wrong about this too, but the announcement would perhaps lead me to assume that S-Group was somehow involved as well? Or is it still just a smokescreen and an excuse, and therefore included in the “assignment”?
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About lease liabilities and their usefulness in the EV metric through an example; let’s assume two companies rent similar premises, but one has a rent of 60 EUR and the other 100 EUR. The companies are otherwise similar, but Company 2 is more indebted, and therefore its average interest rate on loans is 3x higher:
Company 1: average interest rate 2%, lease agreement 5 years, rent/year 60 EUR
Company 2: average interest rate 6%, lease agreement 3 years, rent/year 100 EUR
Company 1, present value of lease liabilities 283 EUR
Company 2, present value of lease liabilities 267 EUR
I would argue that Company 1 has a better lease agreement because the rent is lower and the agreement is longer, as well as better creditworthiness and thus a lower average interest rate used to calculate the present value of liabilities. However, if one decides to include lease liabilities in the EV metric, Company 1 gets a higher EV/EBIT, even if EBIT is the same. Then there are even higher interest expenses for Company 2, but no more on that here.
Here’s another comment on the rationality of the IFRS 16 standard: Vko 40/22: Kirjanpito – Seligson
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Let’s do some schedule speculation here before Midsummer. As is probably well known here, Lindex has promised to announce something about the strategic assessment of its department store operations during June. I’m quite sure that the company’s board of directors has met this week (as most boards of listed companies do before the holiday season), but no announcement has been made.
To me, this suggests that they are seriously trying to get the assessment to a point by the end of June where there would be something else to announce than “the assessment continues until the end of the year, etc.”, as that would have been easy and natural to announce already this week. In practice, the options could be “as a result of the assessment, the department store operations have been decided to be sold” or even a ready sales agreement. Of course, “the assessment concludes and Stockmann remains within the group” is also an option, but I don’t really believe in that myself. There’s still plenty of time until the end of June, as the last day conveniently falls on a Monday; let’s see if we have to wait until then for more information.
EDIT:
These must be announced “immediately” according to the rules. That’s precisely why I don’t believe there will be any postponement announcement this week, as today (or tomorrow ) the boards are hardly still meeting. For a sales agreement, however, the board can probably be called together at any time.
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In December, the announcement about the continuation came on Tuesday, December 17th, i.e., a little before the Christmas holidays. Now it’s June 19th, so something should be heard by next week at the latest.
Of course, the smartest thing would probably be to blast out a postponement announcement tomorrow at 12 PM when everyone is already on the pier drinking beer.
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Talouselämä’s “stock of the week” in the print issue. It can be found digitally there.
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Lindex’s exploration of strategic alternatives for Stockmann’s department store business is expected to conclude by the end of June. If the exploration does not continue until the end of the year, the share price is likely to react strongly to the outcome of the strategic work.
What is your estimate of the outcome of the department store exploration?
- Stockmann will be sold
- Stockmann will remain part of Lindex
- The exploration will continue
0
äänestäjää
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Why did you leave this out of the options?
Strategic partnerships or alliances
Cooperation with another department store chain (for example, Swedish Åhléns, German Peek & Cloppenburg, a Swiss operator or someone else.)?
Soon the result of the “investigation” will possibly be heard.
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Aren’t those already included in the options..? Besides, the question of WHO is completely irrelevant for Lindex at the moment. The essential question is WHAT happens in the big picture (sell or hold) and until that is known, the options you listed are of little significance.
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The review work continues. In Q3, the restructuring should be completed, and in H2, the strategic assessment.
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Lindex packages restructuring, ‘new perspective’ for Stockmann – Stock price sinks | Kauppalehti
What was bad in the news?
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