MAP plans Rp 180b for expansion binge

MAP plans Rp 180b for expansion binge

The Jakarta Post, Jakarta

High-end retailer PT Mitra Adiperkasa Tbk (MAP) -- known for its
SOGO and Debenhams retail stores, Starbucks cafes and Kinokuniya
bookstores -- said on Friday that it would allocate Rp 180
billion (US$17.6 million) for capital expenditure over the
remaining year.

The publicly listed firm's chief executive officer Virendra
Prakash Sharma said the allocation would be used to establish
more stores as well as acquiring more internationally famous
brands.

"All the allocated funds will be fully generated from our
internal cash flows. Next year's capital expenditure will be
around that amount. The allocation is due to increasing number of
new shopping centers," he said during the company's first half
performance report.

MAP has projected to add some 100,000-square-meters of space
for retail stores until the year end, he added.

In its first semester report, ending on June 30, the company's
total retail area stood at 207,971 sqm with the number of stores
so far reaching 469. Some 21 stores were established in the
year's first six months.

MAP's group head of investor relations Ratih D. Gianda said
that to support the company's expansion plan, some 40 stores
would be added in the second half of the year.

"The total number of stores will then stand at 509," she said.

As the 10-year-old company is known for holding worldwide
known brands, more would soon join its list.

"We will convince people that they can only buy international
branded goods at our shops," Sharma said.

In the first semester, the company acquired, among others,
Calvin Klein Jeans, Mexx and Diadora.

Sharma said the capital expenditure would support MAP's
strategy in this year's second half and next year to attract more
middle- and high-class consumers.

"According to ACNielsen research, there are at least 45
million Indonesians categorized in A and B classes. We are trying
to get them to be our consumers," he said, adding that at present
only half of them were shopping in his stores.

Speaking on MAP's performance, Sharma said the company
recorded 25 percent growth in net income to Rp 43.4 billion in
the first semester from Rp 34.6 billion in the corresponding
period last year.

He said revenue growth was still dominated by the growth in
department stores, while geographically, the firm's retailing in
Jakarta contributed 71 percent to revenue growth.

The firm's net sales jumped by 30 percent to Rp 1.3 trillion
from Rp 997 billion in the same period last year.

Satisfied with the company's first half performance, Sharma
said the company would see a total growth of between 30 percent
and 40 percent by the end of this year.

"The second half is much more important for retail business.
Growth in the second half is expected to be higher than the first
half. We have received sales figures for July and August that
show that sales have gone up over 20 percent. That's why we are
confident of meeting the target," he said. (006)