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Challenger profits rise in second quarter

by Stuart Wilson, Wednesday 26 August 2015

Singapore-based retailer Challenger Technologies has announced second quarter 2015 sales of S$84.7m (US$60.3m), up 3% year-on-year. After tax profits for the quarter climbed 21% year-on-year to hit S$3.5m (US$2.5m). The increased profitability was due to the closure of Challenger’s loss-making Malaysian operation in the first half of fiscal year 2014. With these losses stripped out of the business, Challenger was able to record improved profit margins.

Loo Leong Thye, chief executive at Challenger, said: “Although we have improved our net profit due mainly to the closure of our operations in Malaysia last year, the IT retail business in Singapore continues to be challenging due to weak consumer spending power. We also face higher operational costs and difficulty in hiring more staff to serve our customers to an expected level of satisfaction.”

In order to offset higher operational costs, Challenger has spent several years developing, deploying and continuing to enhance its proprietary IT software tailored specifically for its retail operations. Various aspects of its business operations are now managed via this software, including marketing and promotion as well as merchandising functions.

The company claims that the nimbleness and flexibility of this software has strengthened its position and set it apart from industry players. Challenger plans to set aside a further S$1.5m (US$1.07m) over the next three years to hire staff and procure equipment to further enhance this software.

Loo Leong Thye added: “We know that it is important to investing in software to increase our productivity from our current pool of employees, and will spend a significant sum over the next few years to beef up our IT software development team.”

Challenger currently operates 45 stores in Singapore, comprising one flagship megastore, 22 superstores and 22 small format stores. Challenger will continue to grow its retail footprint at suitable locations and plans to open three new stores in the second half of 2015. Stores that are not performing up to expectations will be downsized or closed when their current leases expire, according to the retailer.

DISTREE APAC 2015

Channel APAC is an official Media Partner for regional technology and consumer electronics retail channel event DISTREE APAC taking place October 7-9th in Singapore. Vendors and channel partners requiring more information about DISTREE APAC 2015 should contact events@channelemea.com quoting code DAP15.

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