Headline: Norway‘s Skulle to Close 45 Daily Stores, Faces Mounting Losses
Norwegian retail chain Skulle has announced its plans to close 45 of its daily grocery stores across the country, citing a combination of tough market conditions and strategic reevaluation. Theclosures come amidst reports of significant financial losses, with the struggling retailer facing a potential shortfall of over NOK 650 million (approximately $72 million).
"This is a difficult situation, but a necessary step to secure the future of the Skulle brand," said the company’s acting CEO,Erro Christiansen, in a statement. "We’re simplifying and focusing our operations to better navigate the competitive market and deliver value to our customers."
Skulle, which operates over 250 stores nationwide, has been grappling with challenges posed by discounters like Aldi and Lidl, as well as local players like Coop and NorgesGruppen. The company’s earnings before interest and tax (EBIT) declined by 22% in 2020, reaching NOK 518 million, compared to NOK 660 million in 2019.
The closures, expected to be completed by the end of the year, will primarily affect stores in urban areas and shopping centers. Management hopes to mitigate job losses by helping employees find opportunities within the remaining Skulle outlets or other outlets owned by its parent company, NFI.
Dagens Næringsliv reported that Skulle’s parent company, together with its owners, has committed to providing financial support to help the retailer overcome its current predicament. Despite these measures, analysts caution that Skulle’s future remains uncertain, as the Norwegian grocery market continues to intensify.
In an effort to turnaround its fortunes, Skulle recently launched "Skulle Framtid," an initiative aiming to enhance the retailer’s private label offerings and improve the overall shopping experience for customers. However, it remains to be seen whether these changes will be sufficient to stem the tide of losses and secure the company’s long-term survival.