Mitra Adiperkasa to Close Its Lotus Department Stores in Indonesia
Starting from the end of October 2017, Indonesian retail company Mitra Adiperkasa will close all of its Lotus Department Store outlets as the department store chain fails to contribute positively to the corporate earnings of the listed company. Mitra Adiperkasa is currently restructuring its department store business segment in an effort to reduce the company's operational costs.
Mitra Adiperkasa, which is franchise holder of various well-known global brands such as Starbucks, Burger King, Domino's Pizza, Zara and Nine West, owns five Lotus Department Stores. Three stores will close at the end of October, while the two others had already been closed in 2016. The three outlets that close before the end of this month now offer spectacular discounts (up to 80 percent) to consumers.
Earlier in 2017 Mitra Adiperkasa said it would add around 200 new stores in 2017 with a total size of 70,000 square meters. It allocated IDR 750 billion in capital expenditure (approx. USD $56 million) for this expansion plan. Fetty Kwartati, Head of Corporate Communication at Mitra Adiperkasa, added that the additional outlets would consist of 20,000 m2 of department stores, 40,000 m2 of specialty stores, and 10,000 m2 of food and beverage outlets.
However, Kwartati did not specify which brands would see additional outlets in Indonesia. As regards department stores, Mitra Adiperkasa also operates Sogo, Seibu, Debenhams, and Galeries Lafayette department stores in Indonesia. The closing of Lotus does not mean that Mitra Adiperkasa will focus less on its department stores business segment. It is only part of its restructuring strategy in order to boost the overall performance of its department store business segment.
In the first half of 2017, retail sales contributed 69 percent (or IDR 5.32 trillion) to Mitra Adiperkasa's total H1-2017 revenue (IDR 7.71 trillion). The company now owns a total of 2,200 stores with 150 brands.
On Tuesday (24/10), shares of Mitra Adiperkasa fell 1.55 percent to IDR 6,350 a piece. So far this year, however, the company shares have climbed 17.59 percent.
Stock Quote Mitra Adiperkasa - MAPI: