KUALA LUMPUR (March 20): Parkson Holdings Bhd’s executive chairman Tan Sri William Cheng said the retail group is currently in uncharted territory and he could not gauge the adverse impact brought by the COVID-19 outbreak and the nationwide Movement Control Order (MCO).
“Given the evolving circumstances, the group currently is unable to quantify nor determine the extent of the impact of the [Restriction] Order and COVID-19 on the earnings per share and net asset value per share of the group for the financial year ending June 30, 2020,” said Executive Chairman Tan Sri William Cheng in a statement.
In a filing with the Singapore Stock Exchange, Parkson’s subsidiary Parkson Retail Asia Ltd (PRA) said the group’s operations in Malaysia, its single largest geographical market, will continue to be affected by the mandatory closures and restrictions pursuant to the MCO.
PRA currently operates 42 department stores in Malaysia.
PRA also mentioned their operations in Indonesia and Vietnam have likewise been impacted by the effects of the COVID-19 pandemic and have generally experienced significant reductions in store traffic and store sales during this period, which may worsen if the outbreak situation in these countries worsen.
Cheng pointed out that prior to the impact from COVID-19, the group had already been undertaking various cost-containment measures in response to the overall downturn in the retail industry, including review and closure of non-performing stores, cutting excess headcount and rent negotiations with landlords.
“Having said that, 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, will in aggregate have a significant adverse impact on our operations and earnings during this period,” he added.
Cheng commented that given the rapid spread of COVID-19 globally, it is reasonably anticipated that its Indonesia and Vietnam operations may also be affected in the near future.
Amid the challenging retail environment, shares in Parkson Holdings Bhd had fallen in price relentlessly. The retail stock has plummeted a whopping 97% to 8.5 sen from its 10-year peak of RM4.23 in 2011. Meanwhile, Parkson Retail Asia Ltd's shares have lost 99% of its value to 0.8 Singapore cents from a peak of S$1.33 in 2013.