PETALING JAYA: Parkson Holdings Bhd’s 67.96%-owned Singapore-listed subsidiary Parkson Retail Asia Limited (PRA) expects the mandatory store closures, restrictions on movement and travel, and the overall effect that Covid-19 has on the retail sector will in aggregate have a significant adverse impact on its operations and earnings during this period.
“Further, given the rapid spread of Covid-19 globally, while our operations in Indonesia and Vietnam are presently able to continue, it is reasonably anticipated that these operations may also be affected in the near future,“ PRA executive chairman Tan Sri William Cheng Heng Jem said in a stock exchange filing.
PRA currently operates 42 department stores (out of a total of 61 stores group-wide) and lifestyle concept business stores and counters, as well as food and beverage operations in Malaysia, which makes Malaysia its single largest geographical market.
“Our Malaysia operations (including our group’s headquarters and offices) are and will continue to be affected by the mandatory closures and restrictions pursuant to the restriction movement order.”
Cheng said even prior to the issuance of the order, Covid-19 has generally cast a pall on the already challenging retail sector around the world, and retail malls have observed a decline in footfall as a result of public health advisories generally advocating avoiding of crowded places and congregations, as well as the sharp reduction in tourist numbers attributable to travel restrictions.
Given the evolving circumstances, PRA currently is unable to quantify nor determine the extent of the impact of the order and Covid-19 on the earnings per share and net asset value per share of the group for the financial year ending June 30, 2020.
Cheng said its operations in Indonesia and Vietnam have likewise, been impacted from the effects of the Covid-19 pandemic and have generally experienced significant reductions in store traffic and store sales during this period, which may worsen if the Covid-19 situation in these countries escalates.
Prior to the impact from Covid-19, PRA had already been undertaking various cost-containment measures in response to the overall downturn in the retail industry and its protracted challenging operating environment, such as the review and closure of non-performing stores, streamlining of excess headcount and the initiation of rent negotiations with landlords where practicable. The group will continue to undertake measures to manage the impact from the current Covid-19 situation.
The group has implemented various precautionary measures such as increased frequency of cleaning and disinfecting, temperature screening at the group’s stores and office locations, telecommuting arrangements for certain office staff and staff travel restrictions.
“The group will continue to monitor closely the Covid-19 pandemic situation and the relevant governmental advisories, and will adopt such measures for the wellbeing of its employees and store visitors as may be practicable,” said Cheng.
