Finland’s iconic chain of department stores,
Stockmann, which was already struggling to revive its business before the virus hit, filed the application at the Helsinki District Court on Monday. “The unprecedented situation caused by the coronavirus has led to an extreme decline in customer volumes, depleting the company’s cash in hand,” Chairman
Still, the restructuring may result in “a sizable dilution” of shareholders’ holdings, should Stockmann’s hybrid bonds be converted to equity,
Stockmann’s business has been faltering as consumers increasingly shop online. Its expensive long-term leases have also left it with bloated costs. Revenue has slumped to roughly half its 2012 peak, and its shares are down 98% since an all-time high in late 2006. Its market value is now less than $100 million.
The 158-year-old company has been unprofitable since 2014 but had started to see signs that its efforts to turn around the business were
Group subsidiaries, including department stores in the Baltics and fashion chain
Stockmann has 106 million euros ($115 million) in perpetual variable-rate hybrid bonds and 250 million euros in 4.75% 2022 secured debt outstanding.
(Updates with analysts’ comments in third, fourth and sixth paragraphs)
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