Retailer Matahari upbeat for the coming year

JAKARTA (JP): Retailer PT Matahari Putra Prima said on Monday it planned to open at least five new outlets this year as signs continue to point to a recovery in the country's retail sector.

Matahari's honorary chairman and founder, Hari Darmawan, said the company would open two outlets in Jakarta, and one each in Bali, Pontianak and Solo.

"The retail business has gotten its life back now after losing all its dynamics during the two years of economic crisis," Hari said during an informal question-and-answer session with the media.

Matahari currently operates 74 stores nationwide, of which 24 are located in Jakarta.

The planned outlets will have floor space ranging from between 7,000 and 10,000 square meters, Hari said.

Hari said Matahari was positioned for an expansion with the ample amount of cash it raised from the company's corporate restructuring over the last three years, which included a divestment program.

"We have a lot of cash from the sale of our shares to Lippo Group's Multipolar. This is more than enough to fund the opening of five new outlets to add to the existing ones," Hari said.

In early 1997, PT Multipolar Corporation purchased 51 percent of Matahari's shares, becoming the majority shareholder with a total ownership of over 60 percent.

Despite now being a minority shareholder, Hari has been retained by Matahari as its honorary chairman, in large part due to his long history in the retail business. The Association of Indonesian Retailers is scheduled to honor Hari for his pioneering work in Indonesia's modern retail sector.

When discussing Matahari, Hari warned that the retailer would have to be careful about its expansion plans this year.

"We are very sure the market will improve a lot this year, but I can't tell you yet how much we are predicting the market will expand," Hari said.

Matahari claims 90 percent of its goods are domestic products supplied by small and medium-size companies.

The retailer's public relations manager, Rudy Sumampouw, said Matahari booked a net revenue of over Rp 3 trillion (US$417 million) in 1999.

It reported sales of Rp 2.06 trillion in the first nine months of 1999, up from Rp 1.58 trillion over the same period the previous year.

The company's net profit was Rp 169.11 billion in the January- September period, a turnaround from a net loss of Rp 147.32 billion in the same period in 1998.

"We had a good year last year, with better revenue and a better net income," Rudy said.

Rudy, however, said the company would not disclose its exact net income until Wednesday when it was scheduled to publicly announce its 1999 financial performance. (udi)