September 22, 2017

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Courts reports first quarter results

by Stuart Wilson, Thursday 31 August 2017

Dr. Terence O'Connor, Courts Asia's executive director and group CEO
Dr. Terence O’Connor, Courts Asia’s executive director and group CEO

Technology, electronics and furniture retailer Courts Asia has announced net profits of US$4.49m on sales of US$137.2m for the first quarter ending 30th June 2017. Courts’ profitability in Singapore remains strong and the company has opened two new stores in East Malaysia. Courts is working towards a minimum of five new stores each in Malaysia and Indonesia moving forwards. Revenues for the first quarter declined 4.5% year-on-year with profits falling 31%.

Dr. Terence O’Connor, Courts Asia’s executive director and group CEO, said: “Given the weak retail outlook, we need to be relentless on maintaining the right cost structure. Expenses for this quarter included operating costs for new store rentals, investment in new hires as well as warehouse costs for increased stock. Through internally-generated initiatives, we continue to be focused on driving cost and margin efficiency measures, as well as improving operational excellence.”

He added: “In Malaysia, Hari Raya sales fell short of expectations as a result of weak consumer spending. In addition, the credit collection environment in this country remains challenging given the slower economy. We continue to tighten credit controls to ensure that impairment levels are within control, for minimisation of our risk exposure in this country.”

“Nonetheless, we will leverage the soft retail environment to capture opportunities to set up new stores at attractive locations and reasonable rental rates. We have recently opened two new stores in Sabah, and are in line with our commitment to open a minimum of five new stores in Malaysia in this new financial year,” he continued.

Singapore accounted for 65% of Courts’ sales in the first quarter, with Malaysia contributing 31.1%.

O’Connor added: “In Indonesia, under the leadership of our newly appointed country CEO, Joe Greenway, we will continue with our ‘pop-up’ store strategy to supplement the existing stores to add market share; and are on track to add a minimum of five permanent, new stores in this country. We will also continue to pursue trial door-to-door credit sales to increase our recurring income stream.”

Courts wants to expand solutions-selling in all categories, transform its physical stores into experience centres with the ‘next-generation’ concept, and drive its omnichannel strategy to deliver an integrated online-to-offline experience that would reach out to customers at multiple points.

For its Megastores in Malaysia and Indonesia, Courts continues to transform these stores into destination ‘retail-tainment centres’ by bringing in new tenants to draw in a bigger shopper base and share rental overheads.

O’Connor commented: “To better manage the anticipated uncertain regional retail landscape and stronger competition over the short term, we will strengthen our solutions leadership strategy through five key pillars. This encompasses the expansion of our category solutions-selling, delivering a robust omni-channel solution, making our offline stores experience centres, focusing on the higher-margin furniture segment, and tapping on our unique selling proposition in in-house credit. We are confident that this strategy will position us well to deliver better user experience and build greater brand loyalty with our customers.”

He concluded: “We remain confident of the longer-term outlook, investing in our growth engines and omnichannel strategy to achieve sustainable growth. To invigorate our Courts Asia brand, we are launching a new brand campaign across all three markets in the second half of 2017.”

DISTREE APAC 2017

Channel APAC is an official Media Partner for regional technology and consumer electronics retail channel event DISTREE APAC taking place November 8-10th in Singapore. Vendors, distributors and retailers requiring more information about DISTREE APAC 2017 should contact stuart@channelemea.com quoting code DAP17.

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