Swedish kitchen furniture group Nobia has temporarily laid off around 3,000 employees and withdrawn its proposal for a dividend of SEK 4.00 per share, approximately SEK 675m in total.
The layoffs includes 2,300 members of staff in the UK, where the kitchen store network and supply chain is closed on a temporary basis following UK regulations.
The remaining layoffs impact operations across parts of the Group where all countries are affected, and the majority of layoffs will be backed by state subsidies.
In addition, the group management has decide to cut its salaries by 20%.
Its financial targets of debt/equity ratio and dividend policy will remain unchanged and, according to the company, the group remain stable with available cash and unused credit facilities of SEK 1.3billion.
The chairman of the nomination committee has also informed the company that there will not be any proposed increases of board remuneration.
In a press statement, Nobia reported: “The decisions have been made in light of current market instability and uncertainties regarding economic impacts of the coronavirus (COVID-19), which is negatively impacting Nobia’s business due to, amongst other impacts, lower demand of kitchens.”
Nobia is the parent company of Magnet, Gower, Commodore & CIE and Rixonway kitchens in the UK.
The Nordic group was established in 1996, when Industri Kapital bought Nobia from Stora and shifted its focus to kitchens.
Then kitchen sales amounted to 1.5billion SEK and included brands such as Danish HTH, Norwegian Sigdal and Swedish Marbodal.
In 1999, Nobia made the decision to expand outside the Nordic region and grew its presence in the European market with kitchen furniture manufacturer acquistions.
These included the acquisition of German company Poggenpohl and the British kitchen brand Magnet.
It sold the Poggenpohl group in 2017 but acquired Dutch manufacturer Bribus a year later.
German kitchen appliance manufacturer BSH has also recently announced it is to suspend production in European, Turkey and North American factories.