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Robinson sees up to $120m sales from Raffles City
Group also opening 10,000 sq ft John Little outlet in Sengkang
By: Kalpana Rashiwala
ROBINSON & Co expects an annual turnover of $90 million to $120 million for the two Raffles City stores it will open next March.
The group also revealed it will open a John Little outlet of about 10,000 sq ft at Compass Point in Sengkang in mid-2002. This will be its sixth JL store.
The retailer is confident its two new Raffles City stores will start contributing to the bottomline from the current year ending June 2001 although they would be in operation by then for only 3 1/2 months, said Robinson chief executive Peter Husum at a briefing yesterday for analysts and reporters.
Raffles City will have an 85,000 sq ft Robinsons department store and a 10,000 sq ft Marks & Spencer (M&S) outlet. The latter will replace the group's existing smaller M&S outlet in the mall.
The Robinson group is replacing troubled Japanese retailer Sogo at the Bras Basah Road mall next to the busy Raffles City MRT Station.
Robinson will spend about $10 million to fit out the two stores which will open on March 15 next year. In addition, it will cost the group $20 million to stock the outlets for their opening.
To support this retail expansion, the group would either buy or lease additional warehouse space of about 140,000 to 150,000 sq ft. Assuming the extra space is bought on land leased from Jurong Town Corporation (JTC), the cost would be about $22 million. However, if the group buys a new warehouse, it is likely to sell off its existing 69,000 sq ft warehouse at Tai Seng Drive which may fetch $14 million to $15 million.
The new Robinsons store at Raffles City will be a full-line department store offering goods exclusive to the group. It will also sell merchandise not available at the Centrepoint store on Orchard Road. Likewise, shoppers at the Centrepoint store will be able to buy some goods that are not available at the new Raffles City outlet.
Mr Husum said he was confident that sales at the flagship Robinsons Centrepoint store will continue to grow despite the opening of the new outlet at Raffles City.
Robinson officials were speaking at a briefing following the release of the group's full-year results recently, when it posted a 72.3 per cent jump in group net earnings to $38.5 million.
The group yesterday gave a breakdown of the performance of the various divisions. Robinsons at Centrepoint posted a 26.2 per cent increase in operating profit before tax to $15.5 million, while its turnover went up 18.3 per cent to $140.3 million.
The John Little outlets achieved a 35.9 per cent improvement in operating profit to $7.4 million and a 28.1 per cent rise in sales to $87.5 million.
For its M&S business in Singapore, the group achieved a $6 million operating profit, up from just $828,000 previously, on an 11.7 per cent increase in turnover to $58.9 million.
The M&S business in Malaysia returned to the black with a $94,000 operating profit, against a $1.7 million loss previously.
The group's gross margins in dollar terms rose 22.1 per cent, while total cost overheads increased by a lower 8.1 per cent. Reflecting the group's productivity drive, turnover per employee was up 7 per cent.