Central Retail poised for challenges of AEC

“This year, we have regrouped our organisation, appointing new executives, as we now run a lot of businesses.
“We need more professionals to oversee our businesses both locally and internationally,” said chief executive officer Tos Chirathivat.
He said organisational restructuring to manage all business units under Central Retail’s chain was consistent with preparations for the AEC. The company has appointed two new management executives. This is part of CRC’s five key business strategies to implement this year with a total investment budget of more than Bt28.7 billion.
Alan George Thomson, managing director of CRC Sports Co, will be international business director, while Jariya Chirathivat will be senior vice president for business development.
The main responsibility is to expand the business of all Central Retail business units into Asean countries such as Burma, Indonesia, Vietnam and others.
“For Asean, we need two new executives to boost sales,” Tos said.
“We are looking at many markets in addition to China and Italy to invest in.”
He added that CRC would have a higher chance to succeed if there were collaboration between the private and government sectors to invest in countries such as Burma and Vietnam.
“It’s too late for us to begin investments in Malaysia or Singapore. For Burma, we still foresee a lot of opportunity to invest.”
He said Burma and Vietnam wanted to make a deal with Thailand. If the Thai government could ask for 2,000 rai of land, for example, from the Burmese government, and invite the private sector to participate in any project to develop on that land, this would help develop the two economies altogether.
“We are in talks with 25 Thai brands as business partners to enter Asean markets jointly. We will begin with 25 brands and then gradually [the number] will be increased. Thailand is most likely to become a financial hub of Asean,” Tos said.
He added that the key strategies were expansion of new stores, new project development and land banks, both locally and internationally, with a budget of about Bt12.5 billion.
On the international side, the company is set to launch a Central Department Store in Chengdu, its fourth store in China, this year. Renovations of existing stores have been budgeted at more than Bt2.1 billion and mergers and acquisitions get a budget of Bt10 billion. Information-technology development to support the operation of all business units under CRC’s chain more efficiently is also included with a budget of Bt1.1 billion.
Tos revealed that sales growth last year exceeded target, with net sales of Bt115.34 billion, up 18 per cent year on year. This was mainly driven by the acquisition of La Rinascente in Italy and expansion of stores.
The company has set a goal this year of Bt160 billion in net sales, a 39-per-cent increase. It has an investment budget of more than Bt28.7 billion for the year.
CRC attributed last year’s key successes to domestic and international business expansion such as Robinson Department Store in Chiang Rai, which opened in April 2011, Phitsanulok (October) and Rama IX in Bangkok (December).
Of Thai Watsadu’s nine stores, two were in Bangkok – Sukhapiban 3 and Bang Na – and seven stores were upcountry: Phitsanulok, Lampang, Buri Ram, Samut Sakhon, Surin, Sakhon Nakhon and Surat Thani.
Power Buy opened two stores in standalone format at Nakhon Ratchasima and Pattaya, Chon Buri.
On the international scene, Zen and Central Department Stores in Shenyang, China, opened in August and September respectively.
“If we compare sales mix between Bangkok and upcountry, it is expected that the proportion of sales upcountry will increase to 36 per cent as people in the countryside will have more purchasing power once the minimum daily wage is adjusted to Bt300, and public servants’ salary is increased, besides the government’s economic policies,” Tos said.