Economics and business, Lillehammer | New bang for XXL: Considering closing department stores

The case is updated

(Nettavisen): The company states that 2024 has started with weak sales figures, but that they are well underway with their restructuring programme. This is clear from a stock exchange announcement on Wednesday morning.

XXL sold goods worth 1.6 billion in the first three months of the year. It is clearly weaker than last year when they sold for 2 billion.

Bad news

Thus, the bad news for the company continues. At the beginning of February, the company presented miserable figures for 2023. The result was a loss of a whopping NOK 1.5 billion.

– As 2023 ended, we faced a challenging fourth quarter, which marked the most difficult year to date in XXL’s history, CEO Freddy Sobin said at the time.

In February, XXL announced a downsizing and that they will focus on stores with a smaller size. The retail chain will cut 15,000 square meters of retail space. In terms of size, this corresponds to five to six warehouses.

After this, the tobacco heir Johan Andresen has joined the ownership side, and this has raised the share price for the company.

Will bet on low price

XXL explains some of the decline in sales figures by saying that last year they had record sales, and that this led to unusually high sales figures.

They state that the good winter weather has resulted in good sales of cross-country skiing and alpine equipment, but that it is more difficult to sell expensive, non-seasonal goods.

– We are taking concrete measures to bring XXL back into shape by 2024/25, says CEO Freddy Sobin in the stock exchange announcement.

– We have increased our focus on low-cost products, he says.

Considering closing warehouse

XXL confirms that they will have a “downsizing” of existing stores, i.e. make them smaller.

– XXL has so far not signed any new store openings in 2024. In the medium to long term, XXL still expects the pace of store rollout to be 2-3 new stores per year including store relocations, the company states in the stock exchange announcement.

At the same time, it is clear that the company is considering closing certain warehouses.

– In the short term, the group will continue to focus on optimizing the store portfolio. It includes the evaluation of “selective closures of low-performing stores with limited turnover”, the stock exchange announcement states.

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