COURTS Asia reported a 1.2% decrease in distribution and marketing expenses to SG$13.7 million for the third quarter ended 31 December 2017 (Q3 FY17-18). This was attributed to lower advertising cost in Malaysia. The company added that the cost is partially offset by higher branch salaries for newly opened stores in Indonesia.
This comes as COURTS Asia reported a steady revenue of SG$186.8 million, a 0.6% increase from SG$185.6 million during the same period last year. Malaysia revenue, which formed 24.3% of the group's revenue, saw a 15.9% decrease during the period mainly due to lower sales of goods and earned service charge income.
Stan Kim, COURTS Asia's group chief information officer, has also taken on a dual role after being appointed group chief operating officer. Kim will mainly be responsible for driving business reinvention in Malaysia until a new country CEO is hired. Former country CEO Dolf Posthumus will assume the role of COO of Malaysia, focusing on delivering optimum performance and operations excellence while ensuring adherence to the new regulations.
According to COURTS Asia's executive director and group CEO, Terence Donald O’Connor, the company will have to make some "difficult decisions" which include reviewing the closure of under-performing stores. He added that the focus will be on driving productivity with an optimal store footprint for Malaysia.
Meanwhile, Singapore revenue, which contributed to 72.0% of the group's revenue, saw an increase of 8.0% compared to the same period last year. This was due to higher sales of goods from the relaunch of its online platform, as well as the reopening of COURTS Megastore at Tampines last November.
Singapore’s sales performances of physical stores and its online platform rose 9.1% and 77.4% respectively on a year-on-year basis for the quarter, with the megastore seeing over 30% increase in the first three weeks of its launch and Cyber Monday and Black Friday.
“Whilst our physical stores have been designed to be experience centres, we have also given thought to unifying the customer experience both online and in-store as much as possible. We will continue to invest in the enhancement of our omni-channel and in-store experience," O'Connor said.
Additionally, Indonesia revenue registered a 4.1% dip, forming 3.7% of the group's revenue. To date, the company has opened 22 pop-up stores in the country and is monitoring performance closely, O'Connor said. He added that the leasing space in its Indonesia Megastores are over 70% occupied with tenants, including established local brands such as Ramayana department store, Alfamidi supermarket as well as food and beverage outlets.
"We now will be able to leverage the power of these brands and position the Megastores as compelling shopping destinations," O'Connor said.
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