Sogo partners RHB Bank on payment solutions to suppliers
KUALA LUMPUR: RHB Bank Bhd has signed an agreement with Sogo (KL) Department Store Sdn Bhd to mark a partnership for the RHB Financial Supply Chain (RHB FSC) that provides Sogo’s suppliers a convenient and seamless online platform for financing and payment solution.
Starting with a RM10 million facility, RHB Bank will provide financing to Sogo’s suppliers, allowing suppliers to have access to accelerated payment without the need for collateral. Depending on the take-up, RHB Bank is ready to accommodate more for Sogo, hinging on Sogo’s strength as a strong retailer.
Suppliers will get paid fast, reducing their day sales outstanding. By unlocking value from receivables, suppliers will be able to focus on activities to improve their bottom line. The RHB FSC will also facilitate payment of invoices for Sogo while providing suppliers with full visibility of their receivables, thus allowing easy reconciliation.
RHB group managing director Datuk Khairussaleh Ramli said RHB FSC is designed to ease working capital needs for suppliers. Through the platform, Sogo and its suppliers will be able to strengthen their end-to-end supply chain arrangement.
“Sogo is a long-standing client and we already have some banking relationship with them and we’re now extending this to suppliers. With this partnership, it will enable us to penetrate into a bigger list of suppliers within Sogo, in the form of current account, credit facility and more,” he told a press conference at the signing ceremony here yesterday.
Sogo group chairman Datuk Mohamed Khadar Merican said it has over 1,000 suppliers and if 80%-90% of suppliers use the FSC, the platform has the capacity to transact up to RM500 million over a year.
“The platform will further enhance its ecosystem in providing efficient supply chain management to its suppliers. It will assist suppliers to manage their cash flow better and lead to a greater reliability and certainty of supplies to Sogo.”
Through the FSC platform, suppliers can better manage their cash flow and inventory at reasonable cost, while enjoying a simple and seamless process.
Sogo is looking at chalking up about RM600 million sales at its Sogo KL store this year, similar to that of last year, as it sees a slight uptick in consumer sentiment.
It plans to open seven to eight stores over the next five years in Malaysia, including in Penang, Johor Baru, Kuala Terengganu, Shah Alam and more.
“Each store should be cash flow positive within 18 months,” said Khadar.