Polarn O. Pyret to close operations in Holland and China
Polarn O. Pyret, the Swedish kidswear brand owned by RNB Retail and Brands, recently made an overview of its operations, as revealed in its second quarter interim report for 2015/16.
As a result of the findings, the brand is set to deepen its presence in its core markets. It will thus expand its store network in Finland and Norway. However, Polarn O. Pyret will close down its operations in China and Holland, but the brand's production office in Hong Kong won't be affected and will remain fully operational. Polarn O. Pyret is expecting the measures to generate a positive earnings effect from June 2017.
In Holland, Polarn O. Pyret's e-commerce will not be affected, but three physical stores will close.
"The measures have a clear purpose - to increase the profitability of Polarn O. Pyret and create better conditions for profitable growth. The markets that we are now completely dismantle has so far only resulted in negative profitability while the larger markets, where we have achieved a certain presence and sales, have historically shown an acceptable profitability. I am convinced that profitability has the potential to increase at a higher rate after these measures are implemented", says Magnus Håkansson, President and CEO of RNB Retail and Brands.
The closure of the operations in Holland and China will commence immediately, and is expected to be completed by June 2017.
"The focus on the core markets means that we can now free up resources and better prioritize our investments on our core markets where we have good opportunities to create value for our customers and shareholders. The decision to expand our proprietary store network until June 2017 in Finland and Norway mean that the number of stores will increase in the coming 15 months. The prerequisites for profitable growth in Finland and Norway has been made possible through the acquisition of the franchisees in each country. This is an exciting time for Polarn O. Pyret, as we build an even stronger company for the future", says Magnus Håkansson.
During the 2014/2015 fiscal year, the Dutch and Chinese operations generated sales of about SEK 11m. Total sales for the Polarn O. Pyret business area amounted to SEK 667m for the same period.
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