HERO's Strategic Step To Close Giant, Want To Expand IKEA And Guardian Outlets, How Much?

JAKARTA - PT Hero Supermarket Tbk (HERO) took a strategic step to close all Giant supermarket outlets. HERO will focus its investment on the development of IKEA, Guardian, and Hero Supermarkets which have better growth potential than Giant.

"HERO will focus on investing in store growth in the IKEA and Guardian businesses and continue to invest in the e-commerce business and has ambitions for both brands to become industry leaders in their respective categories," said Director of Hero Supermarket Hadrianus Wahyu Trikusumo in his information disclosure several times. last time, quoted Sunday, August 1st.

After Giant's restructuring, Hero Supermarket will be the issuer's only food retail business in the future. Currently, HERO is actively evaluating the feasibility of converting several Giant outlets into Hero Supermarkets.

In addition, HERO plans to convert five Giant outlets into IKEA. HERO is also negotiating with third parties regarding the potential transfer of ownership of a number of Giant outlets.

However, for now, HERO cannot confirm how many outlets have been successfully sold to third parties. Any outlets that are not converted or sold will be closed later.

For information, a number of Giant outlets are currently owned by HERO. Therefore, HERO is also exploring monetization options for these assets.

This asset monetization will allow HERO to generate capital to fund investments for the growth initiatives of IKEA, Guardian, and Hero Supermarket. Including, supporting all three to adapt to changing market conditions.

Get a loan

Recently, HERO obtained a loan from an affiliate of The Dairy Farm Company Limited of Rp775 billion. HERO explained, the facility will be used for short-term working capital and operational cash needs given the uncertainty of the impact of COVID-19 and the challenging trading conditions faced by HERO.

"This facility has not been used and PT Hero has the right to use this loan facility if needed," said Hadrianus.

Meanwhile, employees affected by the closure of Giant outlets can apply for jobs in other HERO business lines. HERO hopes that it can provide new opportunities along with the development of the Guardian, IKEA, and Hero Supermarket businesses that have positive growth potential.

HERO also hopes that there will be job opportunities for a number of employees who work in the outlets to be taken over by other retail companies.

"PT Hero has clearly communicated this to each of our employees and has done its best to ensure a smooth transition," concluded Hadrianus.