XXL Shares Plummet on Oslo Stock Exchange
This week, XXL shares experienced a massive collapse on the Oslo Stock Exchange, plummeting by over 77%. The sharp decline can be directly attributed to the quarterly report released on Wednesday morning.
The largest shareholder of XXL is the Swedish private equity firm Altor, which holds just over 45% of the company’s capital.
In the report, it was disclosed that the company is seeking to raise 600 MNOK through a rights issue, extend its existing loan facilities, and obtain a bridge loan. XXL’s liquid assets amount to 356 MNOK, with 137 million in cash. However, the report also reveals that the company’s debts exceed 1.1 billion Norwegian kroner.
The Q3 results were equally disappointing, with a loss of 262 MNOK reported, a decrease of 140 MNOK from the previous year.
CEO Freddy Sobin, who took the helm in 2022, acknowledged the challenging market conditions ahead but expressed optimism for a turnaround next year.
“We anticipate a positive trend throughout 2024 with a gradual recovery in sales quarter by quarter. We have also seen initial improvements in our Swedish operations, influenced by three interest rate cuts so far this year. However, despite these efforts, we delivered weak revenue and negative growth this quarter compared to the previous year,” Sobin told Afv.
Throughout the year, the company has implemented a cost-cutting program to streamline operations significantly.
“Unfortunately, the improvements in results are hampered by continued negative market developments, postponing the anticipated market recovery to 2025,” Sobin added.
Sobin emphasized the company’s commitment to reversing the negative trend and strengthening its position as the leading sports retailer in the Nordic region.
“While we are dependent on external factors, as demonstrated by interest rate cuts in Sweden, we cannot predict the macroeconomic landscape in 2025. Nevertheless, we believe in our plan and will be prepared for when the tide turns,” Sobin stated.
When asked about concerns regarding XXL’s survival, Sobin expressed full confidence in the company’s future.
“I have complete faith in this company. I believe in our fantastic employees who work tirelessly every day to provide our customers with the best shopping experience possible. I believe in the plan we have outlined,” Sobin affirmed.
Since its listing in 2015, XXL’s stock has plummeted by 99.8%. Altor became a major shareholder in the Norwegian sports giant in 2019, and the market value now stands at just over 268 million Norwegian kroner.
In conclusion, XXL faces significant challenges ahead, but with strategic planning, cost-cutting measures, and a focus on market recovery, the company aims to regain its footing and emerge stronger in the competitive retail landscape.