3 Min Read
* Department store chain to review strategy by year-end
* CEO Penttila to resign
* Analyst says cost cuts, closures and real estate deals possible
* Shares rise 7 pct (Adds share reaction, analyst comment)
HELSINKI, May 23 (Reuters) - Finnish department store chain Stockmann said on Friday it would revise its strategy by the end of the year, sending its shares up on speculation of restructuring moves by the loss-making company that could boost shareholder value.
Stockmann last month lowered its full-year sales and profit outlook due to weak demand in Finland and Russia, as well as the weaker Russian rouble, after posting a bigger-than-expected loss for the first quarter.
"The board of directors has decided to begin a process of reviewing and revising Stockmann's existing strategy, the outcome of which could have a considerable impact on the present structure of the business operations," the company said on Friday.
It also said its long-time Chief Executive Hannu Penttila, who reached retirement age in 2013, would resign at the end of this year.
Shares in the company jumped 7.3 percent to 11.06 euros. Analysts speculated on possible store closures, real estate deals or a Russia exit. The stock is, however, still 10 percent lower than in was at the end of February.
The company has five department stores in Moscow and one in St Petersburg, which have been hard hit by the Russian slowdown and Ukraine crisis.
"They could perhaps close some of the weakest stores, and it is even possible they would start a total pull-out from that market over some kind of time period," said Nordea analyst Rauli Juva.
He also said the company could look at closing its smaller fashion chain Seppala, which is deep in the red.
Media reports have suggested Stockmann could put its flagship real estate holdings in Helsinki and St Petersburg up for sale, with the Helsinki store possibly worth 800 million euros ($1.1 billion). The company has said it has no such plans. ($1 = 0.7323 Euros) (Reporting by Jussi Rosendahl and Anna Ringstrom; Editing by David Holmes)