Finnish department store and retail group Stockmann Oyj (STCBV.HE) said Tuesday it has chosen its strategic direction and taken the first steps to implement it.

It said negotiations for a new lease agreement for the Oulu department store were unsuccessful and consequently Stockmann will close down the store in early 2017 at the latest. The decision will affect all employees, currently around 230 people, in the store.

Stockmann also said it will close down the three loss-making department stores in the Mega shopping centres in Moscow by the end of 2016, which currently employ around 700 people in total.

As the next step in its efficiency programme, Stockmann is planning to restructure its support functions in Finland and in Russia, with a significant part of the cost savings expected to be reached through personnel reductions which may affect up to 420 people.

In Finland, Stockmann will start codetermination talks that will concern around 1,100 employees in the support functions within Stockmann Retail, Real Estate and Group Administration. The potential reduction need in Finland is at most 260 people, mainly through ending of fixed-term contracts and layoffs.

-Write to Dominic Chopping at dominic.chopping@wsj.com; Twitter: @WSJNordics

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