Tuesday 20 March 2012

Parkson eyes 18 new stores in Malaysia by 2020

KUALA LUMPUR: Parkson Retail Asia Ltd (PRA), which operates department stores in Malaysia, Indonesia and Vietnam, expects to open as many as 18 new Parkson stores in Malaysia by 2020, in addition to the 37 stores currently.

The additional stores would provide the retailer an additional 2.16 million sq ft of retail space from a total of 4.2 million sq ft now.

This expansion is in line with PRA's target of opening at least two stores each year as well as its parent Parkson Holdings Bhd's (PHB) plan to own and manage 10 shopping complexes by 2020.

PHB recently announced a RM3 billion investment to develop its shopping management business. It targets to open 10 shopping centres under the Festival City brand.

PRA's executive director Toh Peng Koon said two Parkson department stores were slated to open this year - in Setia City Mall, Shah Alam, in May and in Nu Sentral, Kuala Lumpur, in the final quarter of this year.

"Besides these two, we have three more confirmed sites that will open over the next two years," Toh said.

Those outlets will be located in Plaza Merdeka in Kuching, KK Times Square in Kota Kinabalu and B8 Mall in Skudai, Johor.

On average, each store has a leasing area of between 120,000 sq ft and 150,000 sq ft.

"Our fit-out and renovation cost in each (leased) department store is usually RM6 million. The concessionaires will spend for their fit-out," Toh said.

Of its 37 outlets, Parkson's best performing store in terms of per sq ft is Parkson KLCC while the Parkson Pavilion derives the highest total sales. Its best performing suburban mall is its store at 1 Utama shopping centre.

Meanwhile, when asked about its performance in Malaysia, Toh said he expected Parkson to outperform the industry retail growth forecast.

The Malaysia Retailer Association (MRA) has made a 6.5 per cent growth forecast in 2012.

"We have witnessed this trend (surpassing MRA's projection) at Parkson for the past few years. We are seeing a 12 per cent same store growth," he said.

"Our profits are seeing even better growth because of our economies of scale. Every one per cent growth in the topline gives us a more than one per cent growth in the bottomline," Toh pointed out.

In the first half ended December 31, 2011, revenue from its retailing business rose to RM435.67 million from RM389.65 million the previous corresponding period.

Profit in the same period rose 41.16 per cent to RM77.14 million from RM54.64 million in first six months ended December 31, 2010.


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