SINGAPORE (Feb 14): Parkson Retail Asia swung into the red in 2Q17 with a net loss of $2.2 million compared to earnings of $2.9 million on weak Same Store Sales Growth (SSSG) and losses incurred by certain new stores and new businesses.
The South-east Asian department store operator also recorded a loss of $7.4 million in 1H17, compared to earnings of $52.4 million a year ago.
Revenue for the three months ended Dec rose 7.4% to $111.1 million. Sales of goods rose 15.8% to $59.0 million while rental income rose 8.3% to $4.2 million. On the other hand, commission from concessionaire sales fell 1.7% to 47.6 million and consultancy and management service fees fell 37.6% to $108,000.
The group’s Gross Sales Proceeds (GSP) increased by 3.9% y-o-y to $263.4 million for 2Q17 due to sales contribution from new stores and new businesses, and positive SSSG recorded by the Malaysia operations which benefited from increase promotions.
Vietnam operations recorded a decline in SSSG of 11.3% as the discretionary retail environment in Vietnam remains difficult while Myanmar operations recorded a decline in SSSG of 29.5% as the landlord of FMI Centre, where the store is located, has served notice to vacate the property for purposes of redevelopment.
Total expenses however rose 13% to $113,820 as changes in merchandise inventories and consumables, employee-related expenses, rental expenses, depreciation and amortisation and rental expenses all rose between 13.0% and 27.2%.
Other income rose 9.7% to $2.1 million.
Looking ahead, Parkson Retail Asia says Malaysia’s performance in the next reporting quarter is expected to remain muted over the fragile consumer sentiment. Vietnam’s performance is also expected to remain challenging over increasing competition in the local retail scene.
Meanwhile, Indonesia’s operations in the next reporting quarter may be undermined by the changing retail landscape in Jakarta as well as uncertainties arising from the ongoing blasphemy trial of Jakarta’s Governor and the upcoming gubernatorial election of the capital city on Feb 15 2017.
“Our existing store at FMI Centre, Yangon will be closed in 3Q17 due to redevelopment of the property by the landlord. A replacement store is scheduled to open later in the financial year,” it added.
Shares of Parkson Retail Asia closed at 12 cents on Tuesday.
