Parkson’s ‘store count’ to shrink

KUALA LUMPUR (March 20): Parkson Corp Sdn Bhd (Parkson) will shut down two of its department stores this year while “mulling the closure of a third store”, The Edge Malaysia reported this week.

The weekly’s report stated that one of the stores set to close is the 18-year-old Parkson Plaza OUG in Kuala Lumpur “when the lease comes to an end in mid-2021” and “the other outlet is a non-performing store”.

In Penang, Parkson 1st Avenue “may also shut in mid-2021 due to declining patronage”.

Last year saw the closure of 35-year-old Parkson Holiday Plaza in Johor Bahru and the outlet in Terminal 1 Seremban. Both were reported to be “underperforming”.

At the end of December last year, Parkson had 41 stores, a decrease from 44 stores as at December 2019.

Parkson in Malaysia saw two consecutive quarters of negative growth and anticipates “that the current quarter will also see a contraction”.

The Edge wrote that “Parkson, like most retailers, saw its revenue take a hit when the Movement Control Order 2.0 was imposed beginning Jan 13, ahead of the peak Chinese New Year sale period”.

“We project that our department store sales will still hover around negative 40% for 1Q2021 (January-March),” Parkson chief operating officer Law Boon Eng told the business publication.

“Hopefully, by the end of the second quarter, interstate travel restrictions will be lifted, which will help to increase consumer spending,” he said.

“Barring unforeseen circumstances, we should remain narrowly positive for FY2021,” Law added.

“Though the outlook for 2021 is still uncertain, the market is picking up. The availability of vaccines and the ongoing process to vaccinate the majority of the population in Malaysia augurs well for quicker recovery, though it will take time to vaccinate enough of the population to reach the targeted 70% to 80% herd immunity,” he explained.

For the current fiscal year, Parkson will continue to stay focused on rebuilding its sales and bottom line and keeping an eye out for new opportunities.

“We will continue to improve operating efficiencies in our stores during the Covid-19 recovery year of FY2021/22 and tap further on the omnichannel [approach] to achieve sales growth. We will also need to address the supply chain disruption,” Law said.

Parkson Corp is Lion Group’s retail arm.

Read the full report in this week’s The Edge Malaysia

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