We - KappAhl

Store network and expansion
During the financial year, 32 new stores were opened: ten in
Poland, nine in Sweden, seven in Finland and six in Norway.
Three stores in Sweden and one in Norway were closed in the
same period. At the end of the financial year the total number of
stores was 319 (291); 144 in Sweden, 92 in Norway, 53 in Finland
and 30 in Poland.
The work of finding new store sites is proceeding according
to plan. Apart from the 319 (291) stores in operation on 31
August this year, there are at present contracts for 52 new stores,
of which 20 in Poland. Of the new contracts, 18 stores will open
in the first quarter and about 30 during the full year 2009/2010.
Two to four stores will be closed during the year. The long-term
goal to increase the number of stores by 20 to 25 per year remains.
Number of stores per country
31 Aug
2009
31 Aug
2008
31 Aug
2007
31 Aug
2006
31 Aug
2005
31 Dec
2004
31 Aug
2004
Sweden 144 138 131 130 125 124 122
norway 92 87 84 81 74 72 72
finland 53 46 42 36 32 30 30
poland 30 20 15 13 11 9 9
Total 319 291 272 260 242 235 233
Financial instruments and risk management
The aim of the Group’s currency policy is to reduce the risk of
negative effects on earnings and to increase the predictability of
future earnings. This is achieved by hedging the subsidiaries’
revenues. The Group’s goods purchases are also hedged, including
future goods flows, which are hedged 3–9 months forward
using futures and options. A substantial portion of the Group’s
goods purchases are in USD, which makes the business sensitive
to changes in the dollar exchange rate. Further information is
available in Note 22.
Financing
All financing and investing of funds is via KappAhl Holding AB
(publ). On 31 August 2009 cash and cash equivalents in the
KappAhl Holding Group were SEK 21 million, compared with
SEK 32 million on 31 August 2008. The Group also has assurances
of credit totalling SEK 2,650 (3,150) million, of which
SEK 2,056 (1,971) million had been utilised on 31 August 2009.
The company’s financing is primarily in the form of bank
loans and overdraft facilities. Further information is available in
Note 22.
Parent company performance
The parent company’s sales for the period amounted to SEK 20
(7) million and profit after financial items was SEK 323 (45) million.
The difference in earnings is explained by dividend of SEK
426 million from the Norwegian subsidiary.
Significant events
Market
KappAhl’s concept is holding up well in a difficult market and
market share is increasing. The poor economy has made consumers
careful with the money they actually have, leading to an
increase in savings in the economy. This primarily affects more
expensive capital goods, but retail fashion is also affected. There
are now some positive signs in the economy, which may make
consumers somewhat more optimistic but at the same time
unemployment will continue to rise, which will have a restraining
effect on the economy.
Investments
KappAhl Holding AB Group
Net investments for the year amount to SEK 261 (692) million
and consist mainly of investments in existing and newly opened
stores. Apart from our range of products, store design and
atmosphere are the most important factors in creating customer
satisfaction and repeat visits. Capital expenditure in store maintenance
is an important factor in ensuring the Group’s longterm
earning capacity. In the previous year SEK 462 million was
expended on acquiring the properties where the head office and
distribution centre operate.
Parent company
No investments were made in KappAhl Holding AB (publ) during
the year. The cost of company acquisitions in the previous
year was SEK 304 million.
Future expectations
The recession has made consumers careful about spending, while
at the same time saving has increased. Some positive signs in the
economy can now be observed, which may make consumers
more optimistic. At the same time unemployment is still rising,
which has a restraining effect on the economy. This makes it
very difficult to estimate future developments. To date KappAhl
has held its own well in the difficult market situation and market
share has increased.
The Group’s target of opening 20–25 new stores per year
remains. The overall assessment is that conditions are good for
continuing positive development in Group earnings.
Material risks and uncertainties
KappAhl is exposed to a number of risks, relating both to its own
operations and to the industry as a whole. Most risk areas can be
managed through internal procedures and controls, while some
are governed more by external factors. The risks can be divided
into business-related or operational risks and financial risks.
36 financial information Kappahl 2008/2009