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ANNUAL REPORT 2016
due to the larger-than-expected decline in
the first quarter of this year, which saw a drop
of 4.4% in sales as compared with the same
period last year. In addition, prices of retails
goods and services have been increasing
gradually since the beginning of this year,
partly due to our weak Malaysian Ringgit.
This further eroded the spending power of
Malaysian consumers in the first quarter of
this year. Retailers continued to depend on
heavy price discounts to attract Malaysian
consumers to buy. As a result, retailers’
profits were eroded.
OPERATIONAL REVIEW
During the year, the Malaysian segment
was faced with challenging operating
environment weighed down by the adverse
global economic uncertainty, currency
volatility and weak consumer sentiment.
All of which have contributed to challenges
encountered by our domestic economy as
well as the retail industry in Malaysia.
Our Malaysia operations achieved a
revenue of RM437.5 million as compared to
RM439.0 million a year ago, a dropped of
RM1.5 million mainly due to closure of non-
performing outlets and weakened consumer
sentiments. Singapore operations also faced
the same situation, where the revenue
declined by 1.9% from RM175.4 million
to RM172.0 million. As for Indonesia and
Vietnam, both countries contributed RM19.4
million and RM8.6 million respectively for
the financial year ended 30 June 2016. In
spite of the slower growth in Malaysia and
Singapore, other export markets achieved
positive growth of 17.7% from RM23.7
million to RM27.9 million mainly due to
higher orders from our existing and new
customers from Middle East.
Revenue contribution by country
Number of stores by country and format
Stand-alone
Boutique
Consignment
Counters
Total
Malaysia
123
1,064
1,187
Singapore
13
56
69
Indonesia
19
92
111
Vietnam
8
36
44
Saudi Arabia / Middle East
17
-
17
Cambodia / Myanmar
5
6
11
Total
185
1,254
1,439
Our full year earnings were dragged down due to continued promotional activities and higher
discount given to drive sales. On costs side, weakened Ringgit has increased our cost of imported
goods by 10% during the FY2016 and continues to be plagued by our inability to pass on cost
due to weaker consumer spending environment, couple with losses on our non-performing retail
stores due to high rental and operating costs. Our licensed brands operation units were the worst
performer, registering a pretax loss of RM8.0 million for this financial year under review.
Geographically, our Indonesia unit’s earning remained healthy with a 50% year-on-year
increase in PBT to RM3.9 million as compared to RM2.6 million in FY2015 but our Vietnam
operations sunk into losses and reported a pretax loss of RM2.0 million as compared to PBT
of RM0.5 million in last financial year due to lower revenue achieved, one-off provision of
inventories and receivable of RM1.1 million and RM0.8 million respectively. Whereas, our
Singapore operations registered a decline in PBT of 40% from RM13.2 million to RM7.9
million due to challenges faced of operating in a high costs and competitive retail environment.
CHAIRMAN’S STATEMENT
Malaysia
Singapore
Vietnam
Indonesia
Saudi Arabia /
Middle East
Others
65.7%
25.9%
1.3%
2.9%
1.9%
2.3%
