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tymied by large rental payments for its stores in high-end malls, publicly-listed book distributor and stationery retailer PT Toko Gunung Agung says it will open 10 small-segment “satellite shop” outlets next year.

Gunung Agung director Junus Hartanto Judianto said that the satellite shops would require about 200 square meters, down from an average of 700 square meters for existing stores.

“It’s not been easy to sell books in the last two or three years. Meanwhile, we have to pay rent for our shops in malls or other places. That’s why we want to establish smaller shops with segmented products,” Junus said during a press conference on Friday.

Gunung Agung spent about Rp 1 million (US$111) to Rp 2 million per square meter a year to rent space for its existing stores in malls, Junus added.

The satellite shops, however, could be opened in rental spaces as joint businesses where the company could shares profits with partners.

Gunung Agung already operates two satellite shops: one in Pekalongan, Central Java and a second in Surabaya, East Java.

“We will establish more satellite shops in areas where our company already has branches that can administer the shops.”

Gunung Agung currently operates 27 stores under the brands Toko Gunung Agung and TGA Bookstores in several cities, including Greater Jakarta, Bandung, West Java; Semarang, Central Java; Surabaya; and Bali.

“The satellite shops will sell books in accordance with the need of the respective areas. For example in Pekalongan, we display more books about religion and textbooks, which is in line with school curricula,” Junus said.

Gunung Agung, the only book distributor and stationery store listed on the Indonesia Stock Exchange (IDX), booked Rp 1.38 trillion in revenue in the first nine months of this year, up 21 percent from Rp 1.14 trillion in the same period last year.

Despite the increase, the company reported a net loss of Rp 3.11 billion as of September, slightly better than a net loss of Rp 3.8 billion in the same period last year.

Gunung Agung senior accounting manager Salmeza attributed the poor performance to rental payments for the company’s mall stores.

Salmeza estimated that the company’s net losses would top Rp 6 billion this year.

“However, we estimate that our consolidated revenue will reach Rp 1.8 trillion this year, up from last year’s Rp 1.53 trillion.”

Gunung Agung operations director Wisnu Adithya Firmanda said that the company would carry out several measures to improve performance.

“Besides the satellite shops, we will reduce the space for unsold books,” Wisnu said.(rcf)