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Retailers start to open new outlets this year
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An employee of PT Matahari Department Store shows off discounted products at PSx Mall in Palembang. (tribunnews.com/Rahmaliyah)
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mid the rise of digital marketplaces, offline department stores have started to expand their businesses by opening new outlets in a number of cities.
PT Matahari Department Store, for example, planned to open new outlets and a distribution center in West Java this year, Matahari’s head of investor relations Margareth Go said.
She said the company allocated Rp 1 trillion (US$70.45 million) in capital expenditure, taken from its internal funds, which was 39 percent higher than the previous year’s capex, to open four to six outlets that would cover 26,000 square meters.
“We will also re-orientate parts of our outlets to focus on lifestyle,” Margareth said recently as quoted by kontan.co.id.
By the end of 2019, the total space of outlets operated by Matarhari would be around 1 million square meters.
For the distribution center, she added that Matahari had bought a plot of land worth Rp 299 billion in West Java. “The new facility will operate in 2020,” she said, adding that the expansion was aimed at improving the company’s performance.
She estimated that sales growth in each outlet would be around 3.5 percent, adding that apart from carrying out the expansion, the company would also close two outlets that had performed poorly.
Meanwhile, PT Ace Harware Indonesia (ACES) also opened new outlets in Bandung, West Java, and Batam, Riau Islands, last week. The new outlets are the fourth and the fifth outlets it has opened this year, bringing the company’s total number of outlets to 181.
“The total investment to open one regular outlet is Rp 50 billion,” said ACES corporate secretary Helen Tanzil, adding that the company would open 20 regular outlets and Xpress outlets, which were more compact, with a total investment of Rp 400 billion.
She said the expansion was expected to increase sales by 10 to 15 percent. (bbn)
