Matahari Dept Store's Performance Was Destroyed In Semester I 2020, How Until The End Of The Year?

Matahari Department Store. (Photo: Matahari.co.id)

JAKARTA - The strong COVID-19 storm seems to hit Lippo Group retailer PT Matahari Department Store Tbk hard. In their published performance release, Matahari Dept Store's performance has seen a very significant drop in the first semester of 2020.

The issuer coded as LPPF suffered a loss of IDR 357.87 billion in the first semester of 2020. This figure is equivalent to minus 130.8 percent, where in the same period the previous year, Matahari Dept Store still earned a profit of IDR 1.16 trillion.

The government's policy regarding large-scale social restrictions (PSBB) in order to stem the spread of COVID-19 is the culprit of the slump in the performance of Matahari Dept Store. Matahari Dept Store's revenue was also seen dropping 62.12 percent annually to Rp2.25 trillion.

Matahari Dept Store's performance in the first semester of 2020 compared to the period there the previous year.

In the first half of 2020, the growth of same store sales growth (SSSG) or the average sales of each outlet was eroded by 62.9 percent due to the decline in the same post in the second quarter of 2020, namely 83.7 percent. Meanwhile, based on the segment, revenue from retail product sales in the Java region is still the backbone of the company's business. suppliers.

Close the outlet

Matahari CEO and Vice President Director Terry O'Connor said, in the midst of the COVID-19 pandemic and the company's efforts to restructure its business, his party decided to accelerate the closure of outlets that were underperforming.

"To date, we have closed six large format outlets in 2020. At the same time, we opened one new outlet in Palembang in May 2020, and two new outlets in Depok and Tangerang cities in July 2020," Terry said in a statement. he wrote, quoted, Monday 3 August.

The addition of these outlets brings the number of large format outlets of Matahari Dept Store to 154 outlets, so the company intends to end this year with a portfolio of around 150 profitable large format outlets.

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Terry added that during the temporary closure caused by the pandemic, Matahari's online sales channel became the company's operational focus. This can be seen from the sales from the other segments which jumped 215.85 percent on an annual basis to Rp778 billion.

Improved in Semester II

Mirae Asset Sekuritas analyst Christine Natasya said, entering the second semester of 2020, Christine's performance from the Matahari Dept Store could gradually recover as a number of steps were taken by management to raise their income, such as eliminating poorly performing brands and reducing working capital.

"The company has shown steady progress since May with sequential increases every week. July sales met management targets, so it could be a better start for this second half of performance," said Christine in her research.

Although the company closed several shops that were not performing well and their contracts expired, the company also opened several new stores, one in May and two in July. Apart from the aforementioned steps, Christine assessed that other efforts such as improvising the arrangement of goods in the store and simplifying product categories had a positive impact on the company's sales.

"This newly opened shop is attracting more people than expected before COVID-19," he said.

While it is too early to judge whether the restructured business will succeed, Christine wants to believe that 2021 will be a better year for the company. He estimates that Matahari Dept Store's revenue will grow by 64 percent yoy in 2021.

"This projection includes the risk of loss, including the closure of shops due to the re-implementation of the PSBB and the economic downturn," he explained.

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