COURTS Asia has made a net profit of SG$6.1 million for the first quarter, which ended on 30 June 2017, compared to SG$8.8 million in Q1 FY 2016-2017. This is coupled with an increase in the company's distribution and marketing expenses by 0.5% to SG$16.2 million in Q1 FY 2017-2018.
This was mainly attributed to higher warehousing expenses in Singapore, as well as higher branch salaries for newly opened stores in Malaysia and Indonesia, partially offset by lower distribution and marketing expenses in Malaysia. The company's overall revenue dropped by 4.5% from SG$195.4 million in Q1 FY2016-2017 to SG$186.6 million in Q1 FY2017-2018.
According to Terence Donald O’Connor, COURTS Asia’s executive director and group CEO, the company needs to be "relentless" on maintaining the right cost structure, given the weak retail outlook. To revitalise its brand, the company is launching a new brand campaign across Singapore, Malaysia and Indonesia in the second half of 2017.
O’Connor added that COURTS intends to leverage on the "soft retail environment" and seize the opportunities to set up new stores at "attractive" locations. In a bid to deliver an integrated online-to-offline customer experience, it also plans to transform its physical stories into experience centres with a "next-generation concept", drive its omni-channel strategy as well as expand solutions-selling in all categories.
COURTS recently expanded its footprint in East Malaysia with the addition of two stores, namely Courts Keningau and Semporna in Sabah, bringing the total number of stores in Malaysia to 71. This comes after it unveiled plans to invest in new store openings across Malaysia and Indonesia in June.
According to O'Connor, Courts will carry on with its "pop-up" store strategy in Indonesia to supplement the existing stores to boost market share, and are also on track to add at least five permanent, new stores in the country. The company will also continue to transform its Megastores in Malaysia and Indonesia into destination "retail-tainment centres" by bringing in new tenants to attract a wider shopper base and share rental overheads.
To better manage the anticipated uncertain regional retail landscape and stronger competition over the short term, O'Connor said that the company will strengthen its solutions leadership strategy through five key pillars. This is to encompass the expansion of its category solutions-selling, delivering a robust omni-channel solution and enabling its offline stores experience centres.
COURTS Asia will also focus on the higher-margin furniture segment and tap on its 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," O'Connor added.
Recently, COURTS announced plans for a SG$10 million revamp of seven of its outlets in Singapore, beginning with an “overhaul” of its Tampines flagship megastore. The revamp for the flagship megastore is said to be completed by the fourth quarter.
Earlier this year, COURTS Singapore appointed Jasmine Seow as merchandise director to drive the company’s commercial strategies and bolster COURTS’ merchandise and services in the new financial year. She continues to report to Tan. Prior to her new role, Seow was marketing director for around three years.