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)