Central announces Bt40 bn investments

The group is also close to reaching a conclusion on the acquisition of another luxury department store in Europe, in addition to similar stores in Italy and Copenhagen acquired by the group a few years ago.

Chief executive officer Tos Chirathivat said Central Group posted Bt249.5 billion in sales in 2014, up 6.6 per cent from the previous year. He said the group had conducted internal changes in its business fundamentals, as well as in policy and organisational structure in preparation for future expansion, particularly into regional and international markets.

As part of its “Luxury Connection” plan to acquire high-end department stores in Europe, the group three years ago acquired La Rinascente in Milan, Italy, as well as Illum, a premium department store in Copenhagen, about two years ago. 

After being renovated, the Illum department store will conduct a major relaunch in the third quarter of this year. The group has also been constructing a new La Rinascente department store in Rome to be officially opened in 2017.

Tos said most of this year’s investment budget would be allocated to the expansion of retail stores both domestically and overseas.

“About 80 per cent of the investment will be for the establishment of new retail outlets, constructing new stores and buying land, while the rest of the budget will be for renovation of existing stores, mainly the CentralPlaza complexes in Pinklao and Bang Na.” Tos added that 10-15 per cent of the budget would be for regional expansion in Asean.

He said the group had also set aside a certain amount for possible mergers and acquisitions of existing luxury department stores, especially in Europe.

Tos said Central Group invested more than Bt30 billion last year. The group opened about eight new shopping malls domestically and two department stores in Ho Chi Minh City and Jakarta. Five new hotels were opened last year.

“For 2015, we plan to open six new shopping malls in Thailand, as well as nine new hotels with a total of 1,800 rooms in Turkey, Doha, Vietnam, and Bali in Indonesia. Most of the hotels to be opened this year will be under management contracts – the group will manage hotels for individual developers in particular countries,” he said. Central Group currently operates 75 hotels and resorts in 18 countries, mainly in China, Sri Lanka and the Middle East. Tos said that of six shopping malls to be opened this year, half would be in Bangkok and neighbouring provinces, comprising CentralWestGate in Bang Yai, Nonthaburi; CentralFestival East Ville on Praditmanutham Road (near the Ekkamai-Ramindra Express-way); and Robinson Lifestyle Center on Srisamarn Road in Pak Kret district, Nonthaburi. Three new shopping malls will be opened upcountry, in Buri Ram, Mae Sot district in Tak province, and Rayong.

He said the group would be more active in stimulating border trade as well as stepping up efforts to attract consumers to its new malls in Chiang Rai, which connects with potential shoppers in Myanmar, Laos and China; Mukdahan, which attracts shoppers from Suvannakhet in Laos; and Udon Thani, which attracts shoppers from Vientiane. It will also focus on Hat Yai in Songkhla province, which attracts shoppers from Malaysia.

In Asean, Central Group has been focusing its efforts on Malaysia, Vietnam and Indonesia. The group has acquired Malaysia-based HCH Industries along with the opening of Robins department stores in Hanoi and Ho Chi Minh City, and the new Central department store in Jakarta. 

This year, the group has proceeded with an investment in Nguyen Kim, Vietnam’s leading retailer, with 21 branches in operation across the country. Together with Power Buy’s strength, Central Group expects Nguyen Kim to grow quite actively in Vietnam itself, and drive Power Buy’s development into a major player on the Asean stage.

Tos said the Internet would be the future of the group’s retail business. To be fully handled by its subsidiary OfficeMate, the group’s online business will be officially launched next month with the target of Bt800 million in sales by the end of this year. 

The group currently offers about 50,000 product items online, and the portfolio will be increased to 150,000 items by the end of this year.