Dutch retail group Blokker has suffered an enormous 180 million euro loss in 2016. More than half of that gap was due to costs caused by its restructuring plan.
Large-scale restructuring
Blokker announced on 16 May that it would fully focus on its flagship Blokker brand, which was founded in 1896, in the Netherlands and Belgium. The group’s other brands (Intertoys, Xenos, Maxi Toys, Big Bazar and Leen Bakker) were all put up for sale. Only Leen Bakker has already been sold, to Gilde Equity Management. The board said increased competition in its three markets (household, toys, living) meant it had to have increased focus as well.
The restructuring plan is the final step in a series of restructuring activities across the group’s various chains. That resulted in more than 100 million euro in one-time costs, increasing 2015’s 52 million euro loss to 180 million euro in 2016.
On top of that, Blokker’s 2016 turnover dropped 5 % to 1.965 billion euro, largely because of 105 store closures. Regardless, turnover would still have dropped 2.3 % if those stores are taken out of the equation.
Positive notes
There are some positive notes as well: 2016’s online sales grew 30 % to 173 million euro, which the company attributes to its product range expansion in the web shop and the increased number of online in-store order locations, from 233 to 918. These order locations generate nearly 10 % of the total online turnover.
The newest Blokker stores’ growth is proof the plan is working, the company feels. Its new store formula houses 5,000 products and another 35,000 items are available online.
The group also says it has a solid financial foundation, perfectly able to see through this restructuring plan: it has a 47.5 % solvency ratio and no net debts. Shareholders also recently extended a 485 million euro line of credit until 2021. Cash flow from operating activities increased from minus 43 million euro in 2015 to 8 million euro in 2016.
