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Parkson Holdings Bhd said its stores in Malaysia, Indonesia and Vietnam will be significantly impacted because of the challenging retail environment coupled with Covid-19 and the Movement Control Order. -Picsource from parkson.com.my/gallery
Parkson Holdings Bhd said its stores in Malaysia, Indonesia and Vietnam will be significantly impacted because of the challenging retail environment coupled with Covid-19 and the Movement Control Order. -Picsource from parkson.com.my/gallery

Parkson Holdings Bhd’s executive chairman Tan Sri William Cheng says the group is concern about its business prospects, amid the current COVID-19 pandemic and the nationwide Movement Control Order (MCO).

He said given the evolving circumstances, Parkson is unable to quantify nor determine the extent of the impact of the order and COVID-19 will have on the group's earnings per share and net asset value per share for the financial year ending 30 June 2020.

"It is expected that the mandatory store closures, restrictions on movement and travel, and the overall effect that COVID-19 has on the retail sector and the market in general, among other things, will in aggregate have a significant adverse impact on our operations and earnings during this period," said Cheng.

Cheng said that Parkson had already been undertaking various cost-containment measures in response to the overall downturn in the retail industry and its protracted challenging operating environment, prior to the impact from COVID-19.

The measures include the review and closure of non-performing stores, streamlining of excess headcount and the initiation of rent negotiations with landlords where practicable.

Parkson is currently operating 42 department stores (out of a total of 61 stores) in Malaysia, and lifestyle concept business stores and counters. It also has food and beverage operations in Malaysia.

All these businesses makes Malaysia the group's single largest geographical market, Parkson said in a recent filing with Bursa Malaysia.

Cheng said, the Malaysian operations, including the group’s headquarters and offices are and will continue to be affected by the mandatory closures and restrictions pursuant to the order.

"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," said Cheng.

The government implemented a nationwide MCO from 18 March 2020 to 31 March 2020 and an extension may be likely, depending on the spread of COVID-19 over the next two weeks.

Prime Minister Tan Sri Muhyiddin Yassin said today that the government may consider extending the MCO by up to two weeks.

In a press conference, Muhyiddin said the National Security Council will meet on March 30 to decide on what to do after the current curbs on movement and businesses expire at the end of the month.

The MCO encompasses, among others, restriction of movement and assembly nationwide and the closure of all government and private premises (with very limited exceptions such as essential services including food retail, pharmacies, etc).

Cheng said the group's operations in Indonesia and Vietnam are also impacted from the effects of the COVID-19 pandemic.

He said the stores in Indonesia and Vietnam are experiencing significant reductions in traffic and sales during this period.

Cheng expects that the situation may worsen if the COVID-19 situation in these countries escalates.

"Parkson is playing its part in the battle against COVID-19 such as taking various precautionary measures like 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," he said.

Cheng said the group will continue to undertake measures to manage the impact from the current COVID-19 situation.

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