Dismal first quarter for Parkson Retail Asia

Parkson Retail Asia has had a lacklustre start to its fiscal year, its unaudited first-quarter figures show.

Gross sales proceeds fell by 8.3 per cent year on year to S$202.4 million (US$148.9 million) for the quarter.

Total merchandise sales generated $198.1 million, with concessionaire sales contributing 74.2 per cent, down from 77.9 per cent for the same period last year, and direct sales contributing the balance of 25.8 per cent.

Attributable net losses to the owners of the company for the period, to September 30, reached $12.9 million. The group also had net current liabilities of $67.9 million at the end of September, the result of investments in new stores and ventures yet to reach optimal level. This was an increase of 22.5 per cent from its June 30 position.

Same-store sales in Indonesia and Malaysia were impacted during the quarter by the absence of Lebaran/Hari Raya festival buying following a shift in the calendar.

Malaysia remained challenging, with the country’s consumer sentiment index, at 77.1, continuing to register below the 100-point confidence threshold for the 13th consecutive quarter.

Consumer spending appears to have also softened in Indonesia, where retail spending has been declining, while Parkson’s same-store sales in Vietnam dropped by 7.8 per cent. This is attributed to the “fading of novelty effects” arising from the entry into the market of such international players as H&M, Takashimaya and Zara.

“Competition in Vietnam’s retail market remained intense,” says Parkson.

In Myanmar, the group closed its store at FMI Centre, Yangon, in January with a new store at Junction Square in the city opening two months later.

Parkson says its performance in the next quarter is expected to benefit from year-end school holidays and festive buying. However, it expects challenges with fragile consumer sentiment and stiff competition.

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