Global hardware and electrical retailer Clas Ohlson has reported a modest rise in sales in a period that has seen it step into the German market for the first time.
The firm, which also retails home, multimedia and leisure, saw sales amount to 1,763 MSEK from May to July 2016,representing a 2% rise in local currencies.
In the same period, profit after tax amounted to 58 MSEK, down 29% – following a record breaking year in the same quarter in the previous year.
Clas Ohlson opened its first store in Germany in May (in Jungfernsieg in Hamburg) followed by another in Altona in the same city. Alstertal, also in Hamburg, has been scheduled to open and online shopping in the Germany market will launch in autumn.
The firm is undergoing significant restructuring in the UK. It previously announced plans to close seven stores in the UK during 2016/2017 as part of the ‘optimisation of the existing store network’. Norwich, Cardiff and Doncaster have already closed, with an additional four being closed before the end of the financial year – Watford, Croydon, Leeds and a further store. It is expected to save 70 MSEK annually and the firm will strengthen its presence in the London region with smaller format stores and plans to open one to two additional stores in the region during 2016/2017.
Clas Ohlson has also signed an agreement to open a store in the Mercato Shopping Mall in Dubai.
President and CEO Klas Balkow said: “We are continuing to strengthen our position but this quarter we saw a slightly weaker sales trend than we are used to. Earnings were impacted by lower growth as well as the weaker NOK, and start-up costs for our launch in Germany.
“Following a record-breaking quarter in the preceding year, we noted a slightly lower growth in Q1 due to factors including negative calendar effects and exchange rate effects. However, Q2 is off to a favourable start with sales growth in August of a full 10% in local currencies, with a particularly strong performance in the Nordic markets.”