Magnet jobs under threat as sales plummet by more than half

Magnet owner Nobia has revealed its second quarter profits and sales have been slashed by the coronavirus lockdown.

President and CEO Jon Sintorn (pictured) confirmed that the company, which also owns social housing brand Rixonway Kitchens, has drawn up plans to ‘increase efficiency’ in the UK, impacting around 240 employees across the store network and supply chain

Across the Stockholm-based group, net sales for the second quarter of the year fell by 25% to SEK 2,741m (£242m), however in the UK sales fell by a devastating 56% to SEK 645m (£57m).

The majority of UK employees were furloughed with the company receiving nearly £11m from the government’s job retention scheme.

“It has been a challenging quarter in unprecedented times,” Sintorn said. “We came from a situation with relatively good demand and orderbook in March to an escalating coronavirus pandemic with national lockdowns, closure of factories and distribution etc., preventing us from operating in a normal manner.”

However, Sintorn said that once lockdown measures began easing business did start to return.

“On a positive note,” he said. “Demand for home renovation, and thus also the demand for kitchens, has gradually improved after the steep decline in April, giving us the opportunity to allocate more resources to sales again. By mid-June we had reopened most of our physical stores and further strengthened our digital sales capabilities to better service consumers online.

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The UK part of the Nobia Group suffered the worst by a significant margin, in comparison the Nordic region managed to deliver a stable result despite the challenging environment with sales almost on par with last year. Equally, sales in the central Europe region fell by 16%.

However, Sintorn said that he believed the second quarter represented the worst of the situation, even though the market will continue to be affected.

“Although our operations are normalising, we foresee that the short-term performance will continue to be impacted by the global recession, albeit not to the same extent as during the second quarter,” he said

“Having said that, I am certain that the structural measures we have put in place, the continued execution on our strategic priorities and the strong balance sheet will provide solid financials and opportunities both short- and long term.

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