Second-quarter pain for Parkson Holdings
Despite slight revenue growth, Parkson Holdings’ retailing division ended its second quarter with a loss.
For the first half, its interim financial report shows there was 3 per cent growth in revenue to RM1.9 billion (US$485.9 million) with an operating loss of RM9 million.
For the second quarter, to the end of December, the department store group’s revenue grew by 16 per cent to RM1 billion, mainly from higher consumer spending for year-end festivities and holiday seasons. The higher revenue coupled with continued business efficiencies enabled the group to move out of the red with an operating profit of RM27 million.
After accounting for impairment losses of RM36 million, the group had a loss before tax of RM3 million for the quarter.
Performance by location:
Parkson Malaysia had 4 per cent revenue growth to RM505 million for the six months thanks to the contribution of new stores. However, same-store sales shrank 4 per cent, attributed mainly to the absence of Hari Raya buying following a shift in the festive calendar. This meant the operating loss of RM20 million was higher than a year ago.
Parkson Malaysia had 45 stores at the end of December after opening two stores and closing two underperforming stores.
Parkson China, the major contributor of the group’s retail business, had encouraging returns from its transformation strategies, says the company. Same-store sales growth was 3 per cent and 2 per cent respectively for the quarter and year to date, with revenue increasing by 4 per cent to RM1.3 billion for the first half.
This enabled Parkson China to report an operating profit of RM32 million against a loss of RM85 million a year earlier.
At the end of December, the group had a network of 48 stores in 30 cities.
Same-store sales growth for Parkson Vietnam sagged 5 per cent for the first half amid intense competition, while the contribution of the Myanmar business remained negligible.
The group had six stores in Vietnam and one in Myanmar at the reporting date. However, the group is about to close its fourth location in Vietnam, Parkson Flemington in Ho Chi Minh City.
This follows the closure of Parkson Keangnam (Hanoi) in 2015, and Parkson Paragon (Ho Chi Minh City) and Parkson Viet Tower (Hanoi) the following year.
Same-store sales were also negative for the first half in Indonesia, falling 8 per cent with revenue lower at RM86 million, largely impacted by the absence of festive spending following the shift in the Lebaran celebration. There was an operating loss of RM13 million.
Following the closure of two stores in Jakarta during the first half, the group ended the year with 15 outlets in Indonesia.