Sarinah talks shop about expansion despite red tape

JAKARTA (JP): Lone state-owned retail company PT Sarinah plans to expand its business despite the tangled web of bureaucracy and stiff competition from private retailers.

Company president Yustian Ismail said on Thursday that Sarinah planned to open 35 new outlets across the country in the next five years.

An outlet will open this month in Yogyakarta and another in Bali in September, Yustian said during a news conference held in conjunction with the commemoration of Sarinah's 37th anniversary.

"Although we cannot move as fast as private retail companies in developing the business, we are trying to improve our management so we can compete with other local or foreign retail companies in the country," he said.

Yustian acknowledged that differences in vision and concept between the government as the owner and the board of directors who operated the retailer chain worked to hamper the company's development.

The company, which is under the State Minister of the Empowerment of State Enterprises, has encountered red tape in its dealings with the minister's office, he added.

However, Yustian said that reform measures introduced last year contributed to making the company more independent.

"Prior to the reforms, the board of management was asked to develop the company, but they were not supported by the government.

"It's just like asking them to run while their feet are chained."

Operational director Imanu Widodo estimated that about 60 percent of the company's prospective buyers were foreigners.

The company's plan to open more outlets outside of the country's economic center of Jakarta is based on predictions for more autonomous and prosperous provinces in the future.

It is also considering opening outlets overseas, such as one in New York, but Yustian said there were risks involved. "We have to be very cautious before implementing the plan."

Sarinah, located on Jl. M.H. Thamrin, Central Jakarta, holds significance as the country's first department store. Indonesia's first president Sukarno, who proposed the idea for the store, opened it in 1962.

The company's promotional efforts have included cooperation with McDonald's and Hard Rock Cafe, which have operated restaurants at the Thamrin site since 1992. The cooperation has successfully boosted the number of visitors by more than 200 percent.

In conjunction with its anniversary, the department store is awarding about 300 scholarships to students at six state schools in the neighborhood. It also conducted employee blood drives. (04)