Parkson expands into food to stem losses
Hit with a 15 per cent sales slump since the introduction of GST in Malaysia, embattled department store operator Parkson is set to enter new categories – gourmet food, supermarkets, beauty – and import new fast fashion brands.
The company has invested RM100 million (US$22.8 million) into a rebranding and repositioning project.
It will also introduce variations of its reform into other countries where it operates: Vietnam, Indonesia, China, Myanmar and Cambodia.
Parkson Retail Asia director Datuk Magic Lee said in a media briefing that the group expected sales to fall as much as 15 per cent after GST came into effect and that the company has also been hit by a heavy devaluation of the ringgit.
“We will keep doing this. Retail needs to keep changing or it will get boring. We will continue investing in new businesses, bringing in new brands, even in food and beverage. We plan to bring in a bakery in the future.”
Parkson plans to launch three “affordable” fast fashion brands from Korea into Malaysia soon, targeting about RM60 million in annual sales from the stores in stores. Those brands are Spao, Mixxo and Who.A.U. The first concessions will open on November 27.
Lee says the company plans to build a portfolio of about 100 brands in its apparel offer and will also continue to open new stores throughout the region.
“At the moment, we are very aggressive in South-East Asia. In Malaysia, we open three or four new outlets each year, and in Indonesia between three and five outlets,” he said.
“In Southeast Asia, we are still fairly competitive. Competition here [in Malaysia] is not so severe. Many strong brands have not come to Southeast Asia yet, so we can bring these brands in.”
Lee says while the company expects the weak consumer sentiment in Malaysia to continue, the company plans to remain proactive “so when the market is ready, we are ready too”.
He hopes the rebranding campaign will fuel at least a 50 per cent rise in sales year on year.