Border closures and repeated requests to stay indoors, due to the pandemic, resulted in upmarket retailer Odel PLC recording depressed resulted for the December 2020 (3Q21) quarter, the interim financial accounts released to the Colombo Stock Exchange showed.
The company recorded revenue of Rs.1.29 billion for the three months under review, compared to Rs.2.29 billion earned in the corresponding period in 2019.
During the quarter, the company reduced its overheads, as its distribution expenses were cut by more than half to Rs.56.1 million in three months, from Rs.139.5 million while the administrative expenses too were slashed by Rs.137 million to Rs.668.4 million.
The company reported negative earnings of Rs.1.35 a share or a net loss of Rs.367.5 million in the October-December quarter, compared to negative earnings of 38 cents a share or Rs.102.1 million net loss in the comparable period in 2019.
Odel is usually patronised by tourists and upper middle and higher income classes of the country.
Tourism makes up 35 percent of the company’s top line.
“In light of these extraordinary events unfolding, drastic rationalising measures were taken subsequently to reduce costs wherever possible, so as to regain the lost confidence by consumers in the external environment, promotions and discounts from time-to-time, though an expense in itself, were offered to stimulate demand with a view to restore normalcy thus, prompting consolidation of footfall,” Odel PLC Chairman Ashok Pathirage said.
However, the company remains extremely optimistic of the changing retail landscape in the country’s economy, as it identifies fast fashion and value fashion as high potential segments in the apparel retailing in the country.
While rebuilding its own brands, the company will also launch a locally developed sportswear range comparable with international quality.
While the company is expanding its store footprint in key locations, it is also making in-roads into the digital retail space via www.odel.com.
The company currently has 84 stores with over 375,000 square feet of floor area.
During the period, the company entered into agreements with Access Engineering PLC for Rs.570 million to construct the diaphragm wall and piling work of the proposed Odel department store.
The company also entered into another similar agreement with China Construction Third Engineering Bureau Co, Ltd on commercial development at Ward Place.
Besides, the company also has Rs.8.3 billion worth of non-contracted capital commitments.
Softlogic Retail Holdings Private Limited held a 97.72 percent stake in Odel PLC, as of December 31, 2020.