S Group opened the first franchise Finnish store of the British Marks & Spencer chain two years ago in Helsinki, and currently there are six Marks & Spencer stores in Finland in total. S Group's Marks & Spencer stores operate on a franchising agreement in Finland, and S Group's regional co-operatives are mainly responsible for the operations.
"Our objective is that S Group's department store and speciality store business is competitive, attractive to customers and profitable. Customers have been satisfied with the selections of Marks & Spencer, as well as the price-quality ratio of the products, but we need to make our operating model more efficient to also reach our financial objectives," says Arttu Laine, executive vice president, SOK.
"The clothing market has been slow in Finland for a long time, and as a result our franchise business with Marks & Spencer has not developed quite according to our targets, and we need measures to increase synergy, among other things, at S Group to improve the profitability of the chain", Laine continues.
James Harvey, Head of International Franchise at Marks & Spencer, said: "We are committed to our franchise business in Finland and continuing to offer our customers quality, stylish clothing. The proposals our franchise partner S Group has set out today will enable them to focus on improving customers' shopping experience and driving profitability at our Finnish stores."
S Group's objective is, among other things, to make the use of space at Marks & Spencer stores more efficient. The plans may lead to the closing of the Marks & Spencer stores in Hämeenlinna and Lappeenranta during 2017.
Because of the plans to improve the profitability of the Marks & Spencer chain, statutory labour negotiations concerning all staff members will be started at SOK's Marks & Spencer chain management and the Marks & Spencer stores of the Hämeenmaa Cooperative Society in Hämeenlinna, the Southern Karelia Cooperative Society in Lappeenranta, the Keskimaa Cooperative Society in Jyväskylä and the Cooperative Society Varuboden-Osla Handelslag in Porvoo.
At the most, the plans may lead to the termination of the employment of approximately 15 people at S Group's Marks & Spencer chain management and Marks & Spencer stores. Every effort will be made to minimize the impact on staff and, for instance, employees of the cooperatives in which labour negotiations take place will be offered jobs at other outlets of each cooperative where possible.
The statutory labour negotiations do not concern the staff of S Group's Marks & Spencer stores in Helsinki and Tampere or other S Group outlets. The objective is that the plans related to streamlining the Marks & Spencer chain are fully completed by the spring 2017.