Destruction Of The Sun Dept. Store, This Lippo Group Retailer Closes 7 Stores And Loses IDR 617 Billion

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

JAKARTA - PT Matahari Department Store Tbk stated that it has closed seven large format retail outlets this year. This decision was taken amidst the deteriorating financial performance of the retail company owned by the Lippo Group due to the impact of the COVID-19 pandemic.

Matahari CEO and Vice President Director Terry O'Connor said that due to the closure of this outlet, the company suffered a loss of IDR 617 billion. These amounts are accumulated for the nine months ended September.

Terry said, the loss was in line with net income which fell 57.5 percent to IDR 3.3 trillion. Meanwhile, gross sales were recorded at Rp. 5.9 trillion or a drop of 57.6 percent compared to the same period last year.

"The ongoing COVID-19 pandemic has accelerated the closure of outlets that are underperforming in line with Matahari's efforts to restructure its business. Throughout this year, seven large format outlets and all special outlets have been closed," he said, quoted from his official release on the IDX disclosure. , Friday, October 23.

Currently, said Terry, Matahari only operates 153 outlets in 76 cities throughout Indonesia. The plan is for the issuer coded LPPF shares to close three other outlets by the end of the year.

"The company intends to end this year with a portfolio of around 150 profitable large format outlets," he said.

Furthermore, Terry admitted, his company had started to recover steadily in July, August and until mid-September. However, when on September 14, the strict PSBB was re-implemented in Jakarta and operational restrictions in other locations caused the company to temporarily close several of its outlets, thus slowing the company's performance during the quarter.

Terry said, to reduce the impact of the pandemic, the company implemented cost tightening, including negotiating efforts to obtain lease relief, which resulted in a decrease in operating expenses by 26.2 percent in the third quarter and 29.3 percent in the January to September period.

"All of our recovery plans are going according to plan, but the increase in visits to our outlets was blocked by PSBB in September. We have paid off the additional credit facilities obtained in May this year. We are exercising tight control over our spending and our capex is still in effect. apart from the two stores that opened this quarter, "he explained.

Not only that, Terry said, the company has slowly reinstated its policy of cutting wages for its employees. Matahari Department Store targets that the salaries of its employees will fully return in the fourth quarter of 2020.