Parkson Retail Asia Opens First Parkson Retail Store In Jakarta
Parkson Retail Asia (PRA) has signed a lease agreement to open its first Parkson branded store in Jakarta, Indonesia in September next year. Located in The St Moritz, within the Puri central business district of West Jakarta, the retail space will be on a 10-year lease, with an option for Parkson to renew for a further 10 years. PRA expects to spend about US$4 million in capital expenditure for the outlet. Notably, the Parkson store will complement its existing department store brand, Centro, which has been operating in the Indonesian retail market for some eight years. Centro targets the middle-income segment of the consumer market while Parkson will be targeting the upper-middle to upper income segment. Going forward, PRA plans to open a further seven new stores within the next fiscal year across Malaysia, Vietnam, Indonesia and Cambodia, adding a total gross floor area of about 100,825 square metres.
Significance: PRA’s Parkson brand will be able to tap on the growing upper class segment while the expansion of Centro’s network will benefit from the fast expanding middle class population, allowing PRA to ride on Indonesia’s fast-rising domestic consumption.
TT International Narrows Losses On Business Restructuring
Distributor and retailer of consumer electronics and furniture, TT International, reported a 9.8 percent fall in revenue to $384.6 million for the full year ended 31 March 2012. Earnings remained in the red but losses narrowed by 68.7% to $10.6 million. The company’s performance for the year was affected by lower sales volume due to poor economic environment, weaker consumers’ sentiment, scaling down of operations due to working capital constraints and closure of European operations. Notably, TT closed certain non-performing operations, mainly European subsidiaries which incurred losses amounting to $6.5 million. However, losses narrowed due to a higher gross profit margin resulting from change of business strategy to focus on retail business.
Significance: TT expects that the company’s future financial performance will improve and turnaround, especially with the completion of Big Box, its iconic mega warehouse retail complex, will recover its investment and boost its results.
Yeo Hiap Seng Privatises Its Malaysian Unit
Yeo Hiap Seng (YHS), through wholly owned subsidiary Yeo Hiap Seng (Singapore), is intending to take Bursa-listed Yeo Hiap Seng (Malaysia) private by way of a selective capital reduction (SCR) and a corresponding repayment to all shareholders of YHS (Malaysia). YHS (Singapore) owns a 61.1 percent stake in YHS (Malaysia). Entitled YHS (Malaysia) shareholders will receive a total capital repayment of RM213.6 million, or RM3.60 per share held on the entitlement date. Based on YHS (Malaysia)’s closing price of RM3.16 on 28 May, this represents a premium of RM0.44, or 13.9 percent. A bonus issue of up to about 61.9 million shares will be proposed to increase its paid-up capital to a level sufficient for the capital reduction. The decision to privatise the unit came as the company no longer see a need to maintain the listing with shares of YHS (Malaysia) being thinly traded and it has not undertaken major corporate exercise or fund raising in the past 10 years.
Significance: Given the uncertainties plaguing global markets, this privatisation allows shareholders to realise cash for their investments at an attractive premium above the prevailing market price.