(Reuters) - Swedish budget retailer Clas Ohlson (CLASb.ST) said on Wednesday it would close its loss-making stores in Britain and Germany.
The 100-year-old retailer will move to online in the UK and Germany, while keeping its stores in Nordics, where it remains profitable, it said.
“After 10 years, the business in the UK is continuing to incur significant losses despite measures in recent years to optimise the store network.” CEO Lotta Lyra said.
Its second-quarter operating profit slumped 74 percent to 33 million Swedish crowns (2.88 million pounds) hit by costs of 90 million crowns.
The closure of stores will affect about 150 employees, the retailer said, adding it expects non-recurring costs of up to 210 million crowns.
It said it expects a positive effect on earnings of 75 million crowns after the stores are closed.
As of the end of the second quarter Clas Ohlson had 6 stores in Britain, 4 stores in Germany and 227 in Norway, Sweden and Finland.
Sales outside the Nordics amounted to 69 million crowns and contributed 3 percent of sales in the second quarter, which rose 8 percent to 2.16 billion crowns.
The retailer kept its operating margin target of 4-6 percent for this and next year unchanged.
Reporting by Marta Frackowiak in Gdynia; editing by Amrutha Gayathri and Jason Neely