Robinson Department Store

Robinson Department Store Plc (ROBINS)

Hong Kong last week at which Khun Nujjaree Sunthadvanich (Financial Controller) and
Khun Phanthep Luangwiriya (Investor Relations) met with 18 investors. Investors
seemed positive with regards to its position as offering the broadest department
store coverage that taps into strong demand in the provinces, its aggressive store
expansion which is supported by a solid financial position, and the low competition in
its market, the middle to high-income department store segment.
Highlights:
ROBINS stands by its ambitious plan to add five stores annually, beginning in 2012,
more active than its 1-2 stores per year in the past. It will bring outlet numbers up
to 49 by the end of 2016 from 30 (11 in Bangkok and 19 in upcountry) at end-2012.
The five stores it plans for this year are all upcountry, four as lifestyle centers and
one in a shopping complex: Kanchanaburi (Feb 2013), Ubon Ratchathani (Apr 2013),
Sakon Nakorn (3Q13), Surin and Saraburi (4Q13). The Ratchadapisek branch will be
closed in March 2013 upon the expiration of rental contracts.
2013 CAPEX is set at Bt3.7bn, funded entirely by internal cash flow. With its current
net cash position, it may increase its debt to finance expansion in the medium
term.
The new lifestyle center format (launched in 2010 and including three stores at the
end of 2012) has been well accepted, generating high sales volume from the
department store area to a level close to that of stores in shopping complexes,
plus high rental income from rental space.
Benefits of the new lifestyle center format include: 1) a shorter payback period
thanks to the rental income; 2) more opportunities to invest in mid-sized to small
cities; 3) more flexibility, i.e. it is free to make its own investment decisions as to
where the stores will be located and when they will open.
To date, ROBINS has department stores in twenty of Thailand’s 77 provinces and
plans to double this to 40 within the next three to five years.
One of its goals is to raise the proportion of sales from its private brand to 10%
from 8% now over the next few years.
2013 sales growth target is 17-18% with SSS growth of 8-9% and gross margin
expansion of 20 basis points.
ROBINS is still focusing on expansion in the domestic market, where it sees a lot of
opportunity. Meanwhile, it is in the initial stage for studying overseas investment.