Pathirage says Softlogic Retail hit by import restrictions and depreciation

The retail arm of Softlogic Holdings PLC, which includes fashion outlets ODEL and Cotton Collection, supermarket Glomark and a consumer electronics business, has been hit by depreciation and import restrictions in 3Q of 2018/19 FY.

“This import-oriented sector was impacted by the depreciation of the Rupee (LKR//USD increased from Rs. 155.97 as at 29th March to Rs. 182.75 as at 31st December). This sector was also clouded by various other macro-economic challenges including 100% cash margin imposition on imports of selected durables and other import restrictions on footwear and apparel,” noted Softlogic Holdings Chairman Ashok Pathirage, announcing the quarterly results.

These challenges meant that the cumulative revenue of the retail sector grew only by 2% to Rs. 27.4 Bn while the quarter reported a topline of Rs. 9.7 Bn. The sector’s operating profit was Rs. 2.2 Bn during 1-3QFY19 while the quarter reported an operating profit of Rs. 624 Mn. Sector EBITDA was Rs. 2.8 Bn for the cumulative period while Rs. 836 Mn was reported during the quarter. Sector PAT for the cumulative period was Rs. 181 Mn.

The retail sector has plans to occupy around 110,000 sq. ft at One Galle Face by Shangri La which is expected to open in June.

“We will be retailing Odel, Armani Exchange, Diesel, Love Moschino, Mango, Bodyshop, Furla, Tommy Hilfiger, Mothercare, Toy Store, Charles & Keith, Aldo, Hallmark, Swarovski, Longines, Tissot, Adidas, Nike, Yamamy, Cotton Collection, Sketchers and Guess at this mall,” Pathirage said.

He added that the new supermarket outlet, ‘Softlogic Glomark’ in Delkanda has attracted positive customer response with the outlet performance exceeding expectations. There are plans to open Glomark branches in Kottawa, Mount Lavinia, Colombo 7, Negombo and Malabe. Furthermore, an essential outlet concept of around 2,000-3,000 sq.ft. is being developed to be set up at Asiri Central, Asiri Kandy, Orion City and in Kurunegala.

– Charindra Chandrasena