Matahari, Ramayana Et Al Crowded To Close Several Stores, The Effect Of PSBB Jokowi And Anies?

Illustration. (Photo: Team Mossholder / Unsplash)

JAKARTA - The COVID-19 pandemic that has been taking place since the beginning of the year in the world has had a huge impact on health and the economy. In Indonesia the pandemic itself has been going on for more than eight months.

Various policies imposed by President Joko Widodo (Jokowi) and DKI Jakarta Governor Anies Baswedan, such as Large-Scale Social Restrictions (PSBB), have also influenced the business world to survive the pressure of the pandemic.

The social restrictions caused by the pandemic have also exacerbated the situation for a number of fashion retailers. So, not infrequently, those who are already far behind from the online business are forced to cut employees and even close shops this year.

Starting from PT Ramayana Lestari Sentosa Tbk (RALS) which was forced to close several outlets. Ramayana management admits that the spread of the corona virus or COVID-19 causes company sales to decline.

Ramayana Lestari Sentosa's Finance Director, Suryanto, said that during the emergency response period for the spread of COVID-19, the company had temporarily closed some shops, until conditions allowed them to reopen.

Photo: Doc. Ramayana Lestari Sentosa

In Depok, Ramayana closed the operation of its Ramayana outlets in the area due to the spread of the COVID-19 outbreak that has hit Indonesia. The company also took steps to terminate the work relationship (PHK) for the 84 employees who were at the outlet.

"The layoffs were carried out for 84 employees by giving severance pay in accordance with the applicable law in the joint agreement signed by the company and employees," he said, in an official statement, in Jakarta, Tuesday, April 14.

H&M Close 250 Stores

Then, Swedish fashion retailer H&M has also announced that it will close 170 stores worldwide this year, or about 40 percent of its stores. The exact affected locations have not been announced.

H&M reported a 50 percent drop in sales during the second quarter of 2020. As stores closed during a worldwide lockdown.

Not only H&M, Victoria Secret also plans to permanently close 250 stores in the US and Canada in the coming months. This will happen until at least 2022.

"There will be a lot more in 2021 and maybe a little bit more in 2022," said Victoria Secret Chief Financial Officer, Stuart Burgdorfer.

A fashion store under the Zara brand is also experienced, Inditex will close 1,200 stores worldwide by 2021. Instead, it will focus on expanding its larger stores.

The company also plans to encourage online business. The Spanish clothing retailer targets a quarter of its sales to come online by 2022.

Matahari Closed 6 More Stores

Most recently, PT Matahari Department Store Tbk decided to reduce the number of outlets from 153 to 147 by the end of 2020. In other words, the company coded LPPF shares closed another 6 outlets, bringing the total to 13 outlets.

"6 unprofitable large format stores will be closed," the company said as quoted from the disclosure of information on the Indonesia Stock Exchange (IDX).

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As for the outlets that were closed, namely 4 in Java, 1 in Bali, and 1 in Sulawesi. The company also decided not to add more outlets in the fourth quarter of 2020 and the first quarter of 2021.

Of the 147 stores that are still being maintained, 23 of them are being monitored for performance improvements. The shops that were not mentioned were everywhere being monitored, reviewed and discussed.

The company is also negotiating with building owners about the cost of renting out outlets to make it cheaper.

Matahari Department Store management is also looking for opportunities to selectively open stores and renovate existing stores to boost productivity. It also needs to invest in replacing old infrastructure.

Indonesian Economy Still Minus until Quarter I-2021

Senior Economist of the Institute for Development of Economics (Indef) Faisal Basri projected that Indonesia would still experience economic contraction until the first quarter of 2021. He said that new economic improvements would occur in the second quarter of next year.

In fact, said Faisal, Indonesia's economic contraction will last longer when compared to other developing countries.

"If we look at the impact of this pandemic, I estimate that the economy will experience a relatively longer contraction. So we will only have positive growth in the second quarter of next year," he said in a virtual discussion, Thursday, November 26.

Faisal explained, in the first quarter of next year, economic growth will still be recorded at minus 0.7 percent. New economic growth returned to positive by 1.4 percent in the second quarter.

As a whole, Indef estimates that Indonesia's economy in 2021 will only reach a growth level of 3 percent, lower than the government's projection of 5 percent.

Senior Economist, Faisal Basri. (Photo: Doc. Kemenkominfo)

Even though the trend of economic performance is improving, he predicts, the number of COVID-19 infections in Indonesia has only reached the peak of the first wave in January and February.

"The vaccine has not been tested like Pfizer and Moderna, how much effectiveness has not been tested but has been ordered. Once again the vaccine is not clear," he said.

Faisal emphasized that the main factor that will determine the process of recovery and economic growth next year is the COVID-19 pandemic. This high level of uncertainty will still hold back the consumption of the middle to upper class, so that overall consumption will still be depressed in 2021.

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