Looting, arson cost retail stores $60m in financial losses

JAKARTA (JP): Indonesian retail stores may lose about Rp 600 billion (US$60 million) from the two days of looting, rioting and arson in the capital and nearby towns last week, a retail store association executive said.

Kustarjono Prodjolalito of the Indonesian Retail Merchants Association (Aprindo) said the tentative estimate did not include lost business from closures of the businesses.

"The total loss could reach over Rp 1 trillion if we include the potential losses resulting from the closing of the stores," he said Friday.

Kustarjono told Bisnis Indonesia daily that retail companies would have to meet the losses alone because insurance did not cover losses due to riots.

He said many retailers would have no choice but to increase their profit margins to be able to cover the billions in losses caused by the looting and burning of their shops.

"Even with the profit margin increase, the retail stores still need at least four years to recover their loss," he said.

At least 40 out of Aprindo's 110 members in Jakarta -- including such major retail chains as Matahari Department Store, Ramayana and Hero Supermarket -- were hit by the looting and arson.

Kustarjono said Aprindo would hold a meeting today to count losses and decide the best time to resume operations.

"With a safety guarantee from the government, we expect to start operating again Monday," Kustarjono said.

He added that it would take three weeks for shops which had been looted and damaged to begin their operations again, while burned shops would need at least three months.

Jakarta was totally paralyzed last Thursday and Friday as thousands of people damaged and burned hundreds of buildings and vehicles, and looted the contents of the destroyed properties, mostly malls.

The Association of Indonesian Retailers and Shopping Centers Operators (AP3I) said Saturday that middle and small scale shops were the worst hit by the orgy of violence.

The association's chairman H.J.A. Sinungan told The Jakarta Post most of the burned and damaged shops were tenants in small shopping centers in Jakarta's suburban areas.

He said major shopping centers in Jakarta, such as Plaza Senayan and Plaza Indonesia, only suffered "minor losses" because they were closely guarded by security personnel and they closed their stores during the riots.

He added that it would take a long time for damaged shopping centers to begin operating again because they would have repair their facilities first.

Sinungan said that several of the association's members would reopen on Monday if the situation returned to normal.

Heru Nasution, senior shopping center manager of Lippo Supermall in Karawaci, Tangerang, said his company was unable to give an estimate of losses from vandalism to the mall.

"We haven't got the results of loss calculations here. We are still counting it. But we will announce the total loss soon, and I hope we can do it on Monday," Nasution told the Post. (gis)