Matahari Department Store Closed 13 Stores This Year, Its Shares Drop 7 Percent

Matahari Department Store outlets in Palu. (Photo: Twitter of Ex-Head of BNPB's Center for Information and Public Relations @sutopo_PN)

JAKARTA - The share price of the retailer owned by the Riady family or Lippo Group, PT Matahari Department Store Tbk, experienced a decline at the close of trading on Monday 30 November.

Quoted from RTI data, the shares of the issuer codenamed LPPF fell almost 7 percent or 6.99 percent to the level of Rp1,265 per share. As for the close of trading last Friday, November 27 2020, Matahari Department Store shares closed at the level of Rp1,360 per share.

Sahal, a major retailer in the country, has a market capitalization of IDR 2.32 trillion on the Indonesia Stock Exchange (IDX) as of 30 November. The decline in Matahari's stock price was allegedly due to the sentiment of closing a total of 13 outlets this year.

"Yes, this includes the pressure on the LPPF," said Binaartha Sekuritas analyst M. Nafan Aji Gusta Utama to VOI.

Apart from that, another sentiment, according to Nafan, is due to the implementation of Large-Scale Social Restrictions (PSBB). The policy is judged to hamper the performance of Matahari and retail companies as a whole.

As is well known, the management of Matahari Department Store recently stated that it would again close six outlets in several locations ahead of the end of 2020. That way, there are already 13 Matahari outlets that have closed this year due to the COVID-19 pandemic.

Quoted from Matahari's disclosure of information on the Indonesia Stock Exchange (IDX) website, the company's management stated that 6 outlets are planned to be closed until the end of 2020. The details, as many as 4 outlets are in Java Island, 1 in the Bali region, and 1 in Sulawesi Island.

"Thus, the number of our outlets that will operate at the end of 2020 will be 147 from the previous 153," wrote the management of Matahari Department Store, quoted by VOI.

In addition, the company also ensures that it will not open new outlets in the fourth quarter of 2020 and the first quarter of 2021.

Matahari management also said, of the 147 operating outlets, 23 of them were included in the watch list to review performance and profitability. This was done to improve the performance of these outlets.

Matahari Management will also continue to communicate with shopping center managers or land owners in order to obtain lower rental costs.