Hero needs Rp 100b to renovate outlets

JAKARTA (JP): The country's retail chain PT Hero Supermarket will need around Rp 100 billion (US$6.66 million) in fresh funds to renovate its damaged outlets in greater Jakarta, the company's top executive said here yesterday.

Hero's president Ipung Kurnia said six of the company's 71 outlets were burned and another 10 were badly damaged during the two-day riots in mid-May.

He said that the total estimated loss due to the massive riots was Rp 90 billion, the majority of which was covered by insurance.

"We have no problem with losses due to the riots because it was covered by insurance," he said.

Looting, rioting and arson hit the capital on May 13 and 14, with hundreds of stores and shopping centers being damaged, burned or looted.

Ipung said that eight of the damaged outlets had already resumed their operations.

"We have to immediately resume outlet operations to cater to consumer demand," he said.

Ipung said that the impact of the rioting and looting on the company's operations was not as severe as that resulting from the country's economic crisis.

"The monetary crisis is a real blow to our company. We are facing a difficult time in 1998," he said.

But Hero's chief financial officer James W. Rush said that sales would remain stable for the rest of the year despite the economic crisis.

"There is significant growth in sales," he said, adding that a decline in consumer purchasing power would not have a big impact on the company.

Hero booked an 11-percent increase in net sales to Rp 1 trillion last year from Rp 904 billion in 1996.

The company reported net sales of Rp 342.7 billion in the first three months of this year, up 35 percent from Rp 253.8 billion over the same period last year.

Ipung said that the company had a total $41 million in foreign debt of which 56 percent was hedged at an exchange rate of Rp 3,000 and Rp 3,500 to the U.S. dollar. (aly)