Sep 12, 2016
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Finnish retailer Stockmann names Veijalainen as CEO

Sep 12, 2016

Finnish retailer Stockmann appointed its interim chief executive Lauri Veijalainen as the company's new CEO on Monday.

Lauri Veijalainen - Stockmann

The fashion and department store group is reorganising its business and cutting costs after earnings fell due to recession in Finland and Russia.

Veijalainen, previously Stockmann's chief financial officer, took over as interim CEO in April after Per Thelin stepped down in a surprise move after 16 months on the job.

Thelin had led restructuring efforts that included pulling out of the Russian market, divesting one fashion chain and starting to lease out retail space at department stores.

"(Veijalainen) has over the past months proven his skills in carrying out major change projects... Stockmann has all prerequisites to return its department store operations back to profit by 2018," Chairman Jukka Heinonen said in a statement.

With Veijalainen in the interim role the company has divested its mail order business and announced further job cuts in Finland.

"It's a good, safe choice, and an expected one. There will be no transition period in the management team and they can continue on the path they're on," said Sauli Vilen, analyst at Inderes Equity Research.

Stockmann reported a small profit for the second quarter but in a separate statement on Monday said its January-August retail sales were down 9.5 percent.

The group expects to report a core profit for 2016.

"They are doing the right things. But the question is, is there enough time to implement changes as sales continue to decline," Vilen said.

Stockmann shares were down 0.6 percent at 0915 GMT on Helsinki bourse's general index which was down 2.2 percent.

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