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Electronic City to open up 20 more stores this year
Electric outlook: Customers browse electronic goods at an Electronic City outlet in Jakarta
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Electric outlook: Customers browse electronic goods at an Electronic City outlet in Jakarta. The Electronics Industries Association (Gabel) predicts that the sale of electronic goods will increase by 10 percent, and will achieve a turnover of up to Rp 42.35 trillion in 2014. The sales of electronic goods reached Rp 38.5 trillion in 2013. (JP) (Gabel) predicts that the sale of electronic goods will increase by 10 percent, and will achieve a turnover of up to Rp 42.35 trillion in 2014. The sales of electronic goods reached Rp 38.5 trillion in 2013. (JP)
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span class="inline inline-none">Electric outlook: Customers browse electronic goods at an Electronic City outlet in Jakarta. The Electronics Industries Association (Gabel) predicts that the sale of electronic goods will increase by 10 percent, and will achieve a turnover of up to Rp 42.35 trillion in 2014. The sales of electronic goods reached Rp 38.5 trillion in 2013. (JP)
Publicly listed electronic goods retailer PT Electronic City (ECII) aims to open 15-20 more stores this year as part of its capital expenditure program for 2014.
Electronic City vice president director Andreas Susanto revealed that the company would allocate Rp 400 billion (US$34 million) in capital expenditure to open the new stores and upgrade its IT system.
Most of the funds were gathered from the company's initial public offering (IPO) last year.
'Capital expenditure will be used to open new stores in malls, to acquire land for stand-alone store construction, as well as to improve our current outlets,' he said on Tuesday after the company's general shareholders meeting at the Borobudur Hotel in Central Jakarta.
Andreas added that the company would invest around Rp 5 billion to Rp 10 billion for each store opening this year and that all stores would be opened in shopping centers.
Electronic City will also begin to expand into new territories, opening five more branches in cities such as Palembang in South Sumatra, Yogyakarta and Magelang in Central Java in mid-June, while also eyeing the possibility of Makassar in South Sulawesi, Medan in North Sumatra and Surakarta in Central Java later this year.
Electronic City opened five new stores during the first quarter, expanding its business into Batam, Riau Islands; Pekalongan, Central Java; Ponorogo, East Java; and Lampung, but all have yet to turn a large profit.
'The new stores have not made enough profit to make a large contribution to our overall revenue. The operational costs of these stores may be a factor,' Andreas said.
Last year, the firm opened 33 new stores nationwide.
Electronic City operates 56 stores, 16 outlets and nine warehouses in 12 major cities in Indonesia as of the first quarter of 2014.
The company is projecting to increase the number of its stores to 96 by the end of next year.
Meanwhile, the company's commercial and investor relations director, Ferry Wiraatmadja, is anticipating a large sales growth rate within the third quarter of this year, due to Idul Fitri.
He said the company had suffered a particularly disappointing net profit in the first quarter of 2014 due to factors such as the weakening rupiah, the rise in fuel costs and the floods that hit Jakarta earlier in the year, which altogether drove down sales.
The company earned a net profit of Rp 26 billion in the first quarter of this year, a 13.8 percent decrease from first quarter earnings in 2013, which totaled Rp 30 billion.
However, the company earned Rp 461 billion in net revenue in the first quarter of 2014, enjoying 20 percent growth from the Rp 384 billion revenue earned in the first quarter of 2013.
Earnings for the second quarter of 2014 are projected to grow by 30 percent year-on-year.
When asked about whether the government-proposed luxury goods sales tax would affect the business when it was in place, he insisted sales would not be affected due to the fact that the company supplies its goods from local suppliers.
Electronic City recorded a 40.7 percent increase in net revenue in 2013, ending with Rp 2.01 trillion, compared to its overall net revenue of Rp 1.43 trillion in 2012.
The company attributes the increase to increasing electronic goods sales. It delivered a net profit of Rp 207 billion in 2013, increasing by 65.4 percent from 2012's figure of Rp 125 billion.
The company's shares traded on the Indonesia Stock Exchange (IDX) at Rp 1,965 apiece on Tuesday, 3.42 percent higher than the previous close. (dyl)
