Swedish hardware store chain Clas Ohlson has decided to close its network across the UK and Germany as the markets continue to incur significant losses.
The company will focus on online shopping and will also develop a scalable business model for long-term profitable growth in both countries initially, followed by other markets.
Furthermore, Clas Ohlson plans to begin store closure after a careful consideration of the lease terms for each store.
According to the company, the store closure process will affect approximately 150 employees with an estimated total settlement cost of SEK210m ($23.31m).
Clas Ohlson president and CEO Lotta Lyrå said in a statement: “After ten years, the business in the UK is continuing to incur significant losses despite measures in recent years to optimise the store network.
“The evaluation of the pilot of four stores in Germany has revealed that the operations will be unable to deliver on plan and therefore the right conditions are not in place to achieve profitability.
“Against this background, the store network in the UK and Germany will be discontinued and in line with the new direction our presence in these markets will be concentrated to online shopping.”
Clas Ohlson will continue its operations in Sweden and Norway as they registered positive growth and earnings.
The company is also planning to expand its presence in Finland as it identifies opportunities for improving profitability.
According to Reuters, Clas Ohlson had six stores in the UK, four in Germany and 227 in Norway, Sweden and Finland, as of the end of the second quarter.