The Finnish luxury brand was sold by millions – then the loss thread began

Balmuir has four stores and an online store. Picture of Pohjoisesplanad from Helsinki. Outi Järvinen

Finnish premium brand Balmuir was sold to Luhta’s parent company For Polap-Team Oy In 2019.

-At the 2019 balance sheet of Polap-Team Oy, the acquisition cost of shares in subsidiaries increased by EUR 6.1 million from the previous year, so the trade amount of the shares was very likely to have been of that class. According to the annual report, Balmuir Oy was the only acquisition of the year, says Kauppalehti Analyst Ari Rajala.

At the time of the purchase, Balmuir made a profit. Net sales were EUR 8.3 million and the net profit was EUR 689,200 in the financial year preceding the trade in March 2019.

Since then, the company has made a loss every year, and net sales have traveled or decreased. In 2024, the company had a turnover of EUR 6.9 million and a loss of EUR 434,200.

Cumulatively, the company has made a loss of 3.65 million after the purchase. By 2022 the loss was at its highest, EUR 1.3 million, but since then the losses have decreased. The loss -making activities have been supported by EUR 1.5 million equity investments and EUR 1 million in capital loans. The company’s equity ratio has fallen to a weak 12 % level.

– If you look at the development of Balmuir after the acquisition, the buyer cannot be satisfied with the purchase, at least on the figures, Rajala interprets.

If Rajala’s estimate of the purchase price is correct, the P/E-8.9 trade was relatively high for an unlisted company. The P/E figure tells you how many years the company would make a profit if the result remained unchanged.

How does the owner see the situation?

KV plans were canceled but faith remains

Business Director of Balmuir Keni Luhtanen Balmuir is still a good purchase, even though recent years have been challenging. The owner’s belief in the brand and its long -term potential has remained strong, Luhtanen assures.

“After all, we would not continue to operate if we didn’t see opportunities,” he says.

The time for the acquisition was challenging, says Luhtanen. Quickly after the purchase, Korona struck in 2020. A couple of years later, the Ukrainian war that weakened consumer purchasing behavior and expelled Russian tourists from Finland. This negatively affected, for example, tax free sales.

The new owner had the intention to increase exports. According to Luhtanen, the export market was aimed at Central Europe and Asia, especially Japan.

Owner Heidi Hietalathen Jaara, commented in 2019 in the press releasethat “the strong relationship of the new owner, including European and Russian dealers,” supports international growth. According to Luhtanen, Russia was not a significant export market at the time or after purchase.

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The company had to retreat from internationalization plans shortly after the transaction.

“It would have been a waste of money then,” Luhtanen says.

As the market recovers, the company aims to return to its original plan.

Luhtanen says that the company has undergone structural changes and developed a collection. These are aimed at improving performance. The company is seeking a profitable result in the current financial year and aims to seek growth from the home country.

Balmuir’s product range includes accessories, clothing and home textiles.

Liability bump as an inheritance

At the time of trade Finnwatch published a report that Balmuir’s partner HS Exports subcontractor paid In India, the lower salary for its employees and did not handle pension contributions. At its lowest, the employee’s daily salary was less than three euros.

The reputation risk hit the change of ownership and joined the partner used by Balmuir. According to Luhtanen, the pre -acquisition’s Diligence inspection mentioned that Finnwatch is publishing a report on the subject.

The new owner interrupted the cooperation with an Indian partner, as the improvement could not be verified after remedial measures. Luhtanen says that the products had to be withdrawn from sales. Other supplier contacts were also reviewed.

Luhtanen says that the former owner -time Balmuir records differed in some respects from Luhta’s practices, but the differences were not in the size class that they would have had a bigger importance to the company’s financial figures and did not affect the trade.

Old owner Heidi Hietala says that there was never discussed in recording practices.

Rely on the future

Balmuir is also involved in the opening of Luhta’s new Your & More chain for certain product groups. However, the brand is still intentionally wanting to be distinguished by other clothing brands in the Lahti family company, as this is the only premium brand of the company.

Luhtanen reaches to speak that Luhta’s quarter is 25 years.

– This has been challenging years due to outside factors. Yes, we still see that this has been the right investment for us in the long run, he says.

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