Lindex reduces its costs

Lindex reduces its costs As announced earlier Lindex has drawn up an action programme to contribute to the aimed restoring of the company's profitability. In this work, a number of cost saving measures have now been identified. These are expected to have an annual effect of approximately SEK 100M on the company's profit. Lindex's action programme, which has been implemented since the turn of the year, includes cost savings in the short term as well a comprehensive change in the company's organisation and working methods. The surplus autumn inventories have been phased out and Lindex's expenses have reduced. The purchasing volumes for the coming seasons have also been adapted. This is expected to make a full impact during the fourth quarter of the current year. The following cost savings will be implemented immediately: · A reduction of around 50 positions, mainly at the head office in Alingsås. The majority of the reduction can be implemented without any redundancies. In total, some 10-15 staff will be made redundant. · Closure of 5-10 stores in the store network based on a review of the actual results and future opportunities of all the stores. In total, around 40-80 positions will be affected. · A reduction the number of hours worked in the store network by approximately 50,000 hours per annum. · Continued reduction in expenses, partly through lower storage and transportation costs, fewer development projects, more efficient marketing and a reduction in the number of consultants. In addition, the reduced expansion rate will generate a reduction in expenses in connection with the establishment of new stores. In total, these savings are expected to generate an annual profit contribution of SEK 100M within 6-9 months. The structural costs for store closures and other changes are expected to amount to SEK 30-40M in the current financial year. Analysis of business processes will increase the efficiency The above cost savings will be implemented immediately and the project will then move on to a more strategic phase in which Lindex's business processes, organisation and working methods will be analysed. The aim is to develop further the Lindex concept into a competitive and profitable international retail business. The result of this work will be announced during the autumn. Strengthened organisation in Germany A separate German organisation will be established in order to achieve more rapid result improvements in the German operations. In addition to the current work with the German operations, new solutions and concepts will be tested in a number of pilot stores. Successful changes will then be implemented throughout Lindex's store network. Both changes in the product range and the store concept will be included in the test operations. For further information, please contact: Hans Johansson, President and CEO Tel: +46 322-77 702 Åsa Lindell Byström, Director of Group Tel: +46 322-74 400 Communications & Investor Relations Mobile: +46 706 33 59 79 Lindex is a retail chain with stores in the Nordic market and in Germany. The Group's product segments are ladies' wear, lingerie, children's clothing, and cosmetics. ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2001/05/10/20010510BIT00890/bit0002.doc http://www.bit.se/bitonline/2001/05/10/20010510BIT00890/bit0002.pdf