As a direct consequence of the significant drop in sales following the forced closure of stores due to the Covid-19 crisis, the Norwegian multichannel retailer XXL decided, in accordance with its contingency plan, to temporarily lay off around 1,000 store employees in Norway and to start cooperation negotiations in Finland on the necessity of temporary layoffs. Following the closure of its five stores in Austria on March 16, XXL also initiated the temporary layoff of around 200 employees there. In a press release Tolle Grøterud, interim CEO of XXL ASA, regrets these consequences in connection with the ”extraordinary situation with [the] state of emergency around the globe and a lot of uncertainties related to it.“ He calls it a ”situation with low visibility and high volatility,“ and justifies the company’s decision as a “necessary action.” The company also announced that it will continue to consider and implement additional cost reduction measures throughout the group.
SGI Europe had reported earlier about the problems at XXL ASA. During Q1 2020, XXL successfully sold off a substantial part of its inventory with significant lower margins, mainly winter products. This, in combination with substantially lower purchased volumes, has reduced inventory down to NOK 2.4 billions (€208.8m-$230.3m), and improved the liquidity reserves, ending at NOK 0.8 billion by the end of February 2020, and net interest bearing debt at NOK 1.3 billion (before the subsequent offering of NOK 0.1 billion (€8.7m-$9.6m) in March 2020). Recently, XXL saw solid revenue growth in all its main markets and across the sales channels. Following the closures due to Covid-19 in Austria, Norway and Sweden, brick-and-mortar sales declined rapidly, but were initially offset by strong growth in e-commerce. XXL currently operates stores and e-commerce in Norway, Sweden, Finland, Denmark and Austria.
