- Annual report 2008/2009
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Annual report 2009
- 2009 in brief
- President’s comments
- Hemtex share
- Presentation of business operations
- Board of Directors’ report
- Income statements
- Balance sheets
- Changes in consolidated shareholders’ equity
- Changes in Parent Company shareholders’ equity
- Cash-flow statements
- Notes
- Proposed distribution of earnings
- Audit report
- Nine-year summary
- Board of Directors
- Corporate Governance
- Management
- Hemtex stores
- Information about the AGM
- Annual reports archive
- Annual Report 2010
- Annual Reports archive
"A more profitable store concept and more attractive customer offering constitute the foundation for the new Hemtex"
For us, 2009 was a year characterized by the work required to transform from the old to the new Hemtex.
Growing competition in the home textile market combined with the Group’s price strategy, featuring extended discount sales over long periods of time, eroded consumer confidence in Hemtex and led to shrinking market shares. Accordingly, we launched necessary and determined efforts to convert the Group into a sustainably profitable and modern home textile chain, with roots firmly anchored in Scandinavian textile design. I would like to emphasize three actions taken during the year that laid the foundation for this work.
- We downsized the product range in 2009 by as much as 40% in order to more clearly define the customer offering, improve distribution and sharpen our focus on purchasing. As a result, we were able to sharply reduce our inventory levels.
- We implemented a share issue that, in addition to providing Hemtex with SEK 164 M, also meant that our long-term majority shareholder Hakon Invest increased its ownership share from 34.6% to 68.5%. We thus gained a long-term owner with comprehensive knowledge and experience of the Nordic retail trade.
- We changed our price strategy from extended periods of discount sales to offering continuously attractive prices and, in turn, started to restore consumer confidence in our broad range of quality products.
At year-end 2009, we were pleased to note that our actions had yielded the intended effect. In the shorter fourth quarter, we reported operating profit of SEK 26 M before nonrecurring costs. Consequently, we are prepared to realize the Group’s newly formulated business plan and take the first true strides in the rejuvenation work. The point of departure in meeting this challenge may be summarized as follows: we will increase our cost control and adopt a consistent approach to unprofitable structures, and we will change the fundamental concept of the brand to better reflect our ardent passion for home textiles.
We will gradually increase cost control by upgrading the business system for the flow of goods and our product-range planning covering every article’s journey from design concept to sales. The articles at the retail level will be increased in parallel with demand and, conversely, reduced in the event of declining attractiveness. This will create increased scope for stable and healthy corporate finances. At the same time, we will take actions such as changes in depreciation periods to better reflect useful life spans in the Group and goodwill amortization in Sweden and Denmark. Accordingly, the abbreviated fiscal year (May–December 2009) includes nonrecurring costs totaling SEK 110 M.
The adjustments will be further solidified during 2010. We are implementing responsible divestments of our Group stores in Denmark and Norway, reducing the number of stores in Finland by half and terminating our cooperation with the remaining franchisee in Poland. We are concentrating our efforts in the Swedish market, while also retaining a presence in Finland. This will provide the Group with better potential to adjust the operations, as well as greater security in our continued efforts to establish a more profitable retail store concept and a more attractive customer offering.
In the autumn of 2010, we will open the doors to the new Hemtex. In a pilot store, we will demonstrate the new store concept, the changes in our visual identity and the refurbished product range, factors that collectively comprise the hub in our new image. The product range will be divided into three clearly defined product categories:
- Scandinavian, a style that represents Scandinavian simplicity in a classic expression.
- Heritage, a warm style for which we derive inspiration from our own heritage, combined with inspiration from romantic gardens and New England styles.
- Contemporary, A style reflecting a strong contemporary trend. This may involve cooperation with external designers or brands.
Borås, March 2010
Erik Gumabon,
President and CEO
Erik Gumabon,
President and CEO