COURTS Asia has signed a deal to allow insurer Prudential to operate at all its Singapore stores for a fee, chief executive Terry O'Connor said yesterday.
Speaking at Courts' results briefing, Mr O'Connor said the move will help mitigate costs and liven up offerings at its stores.
He said Courts will have some operational involvement in terms of location and ensuring "it's a good experience for our stores".
"On a customer permission basis, it may lead to some joint marketing opportunities, but we are not in the insurance space." The joint marketing would relate to Courts' credit offerings, he said.
Mr O'Connor expressed concern over sales growth in Malaysia, with occupancy expansion growing faster than sales expansion in the first quarter.
The group expects to shutter a few stores in areas such as the Klang Valley, where it has about 19 stores but "could probably do with 16 or 17".
But it will continue to invest in under-penetrated markets, such as East Malaysia, where supply chain and marketing costs are high as "there are too few stores to make the warehouse truly efficient", said Mr O'Connor. The group expects to open eight stores in Malaysia in the financial year.
In the first quarter of this year, it opened a store in Kelantan and relaunched seven other stores in Malaysia.
Courts is making a comeback to the Indonesian market in the current quarter, with its flagship 140,000 sq ft Bekasi Megastore scheduled to open next month. It had previously closed its business in Indonesia, which comprised many small unprofitable stores.
At Bekasi, it will sub-lease about 30,000 sq ft largely to food and beverage operators at a margin, which will help it offset rent, Mr O'Connor said, adding it is looking for a site for a second store.
Courts' first-quarter net profit shrank 27.9 per cent to $5.1 million on a 1.5 per cent dip in sales revenue to $194.1 million.
This article was first published on August 15, 2014.
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