Softlogic to embark on massive fashion, ICT retail drive

2 September 2015 03:22 am - 0 - {{hitsCtrl.values.hits}}

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Diversified conglomerate Softlogic Holdings PLC intends to engage in a massive retail drive in the fashion and ICT sectors in the coming financial year, banking on the increased consumer consumption seen this year.

“Our immediate goal is improving performance in retail and ICT sectors. Consumer and investor confidence recovered during the year, due to low inflation and interest rates, and the exchange rate remaining stable,” Softlogic Holdings Chairman/CEO Ashok Pathirage said.

Softlogic purchased a majority stake in fashion retailer Odel PLC in the past financial year, and holds franchises for international brands in ICT and fashion including Levi’s, Tommy Hilfiger, Dell and Samsung and Nokia.

It will be launching Body Shop products this year.

It owns 41,000 square feet of fashion retail space in Colombo spread across 20 brands.

To promote synergies, Softlogic Brands Pvt Ltd was acquired by Odel, and Pathirage said that all fashion brands owned by Softlogic would be available at Odel in the future.

“Softlogic’s retail operations have plans to increase island wide expansion of retail space. Softlogic Retail has ambitious plans to target a total retail space of 335,000 sq. ft. in three years,” he added.

The expansion is to come mainly through upgrading the Odel flagship store to include a 300,000 square feet mega mall. Other large retail stores will be discontinued while smaller stores are to pop up geographically.

“Whilst we serve customers through 20 stores, our new business model aims at smaller outlets and one big mall. Thus, we have closed down some of our bigger outlets including Maharagama and Ja-ela, with other outlets currently under evaluation,” Pathirage said.

Meanwhile, the ICT sector and other consumer durables push is expected to complete sooner.

“Our current 208 showrooms cover retail space of 263,714 sq. ft, and we expect to have 250 stores in place by end-March 2016. Expansion is planned taking an approach emphasising cost consciousness and synergy,” Pathirage said.

He added that the retail ICT sector has seen an increase with higher purchasing power, and expects demand for business ICT solutions and upgrades which were deferred due to political stability to pickup.

The current consumption drive has been triggered by the availability of cheap credit amid historically lower policy interest rates and the administered price cuts and other handouts annouced in the interim budget.

Despite the Central Bank holding policy interest rates stable this week in a growth biased environment, it has let the rupee fall 2.3 percent against a stronger dollar so far this year, and may have to let the market forces to decide the exchange rate in the near future to maintain the country’s foreign reserves at healthy levels.

This would trigger inflation in the import driven economy and could remove the benefits consumers gained in the interim budget. Interest rates would inevitably go up, and consumers may opt to save instead of spending on more expensive products.

However, Pathirage believes that the strength of Softlogic’s brand portfolio, increased income for the emerging middle class and the interest the increasing number of tourists visiting the country have shown in shopping at Odel and its Luv SL brand will drive the group to progress.

“Further down the road, we are looking at the possibility of leveraging more synergies with Softlogic Holdings to take our brands to international markets and to bring more international brands to Sri Lanka,” he said.
(CW)

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Softlogic to embark on massive fashion, ICT retail drive

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