Sportland: Record Loss of 205 Million EEK in 2009

The devaluation of Russian Ruble and Ukrainian Grivna have been mentioned as among the reasons that caused the record loss of 205 million kroons for Sportland International Group in 2008.

Half year late in disclosing the report on its financial activities during 2009, Sportland group confessed the loss citing three main issues as the causes of the negative development of the past twelve months: Russian and Ukrainian devaluations, discount campaigns and new stores.

According to Are Altraja, one of the owners of the group, the pressure of holding discount sales when the permanent costs did not decrease played a strategic role as the fact that many of the shops belonging to Sportland were in a launch phase and so in need of time to consolidate their position in the market.

As a result of the financial situation, the role played by Sportland group in its markets changed significantly during 2009 with 645 laid-off employees and 56 stores for a space of over 16.000square meters closed  – a reduction of one third either in terms of employees and shops if compared with the situation at the end of 2008.

One week ago Sportland managed also to re discuss the terms of its loan with Swedbank, closing a discussion lasted for over a year and a half which allows the group to to get an extension of five years to pay the loans that amount to millions of kroons.