SSI sets lower 2016 capex

SSI Group, Inc., the country’s largest specialty store retailer, is allotting R600 million for capital expenditures this year or 40 percent lower than last year as the company seeks to rationalize expansion programs through new store opening in more developed areas and closures of nonperforming outlets.

On the sidelines of the company’s stockholders’ meeting, SSI president Anthony Huang said that the firm will be opening new stores as well as rationalize or close existing stores that have not met expectations.

This year’s capex budget, however, is just 40 percent of the R1.5 billion it allotted for 2015.

“The expansion and closing down will be both based on the store’s performance. In the case of Mindanao, we are closing stores in Cagayan de Oro, General Santos, and Zamboanga City. We are also closing down some stores in Bacolod. Our sales there are not meeting our expectations,” Huang said.

SSI had 792 stores as of the end of December, 2015, consisting of 117 brands with a total store area of nearly 150,000 square meters.

“The country’s robust economy is closely related to our performance, as you can see for the past five years, we have continuously grown, and this is brought about by the increasing affluence of our country,” Huang noted.

Huang said bulk of its expansion program will be focused on Metro Manila and Metro Cebu.

“Metro Manila and Metro Cebu are doing very well for us, so we would like to continue expanding in those areas. Some of them work some of them don’t, which is normal. Our Davao City operations is doing very well as well as in the province of Pampanga,” he added.

SSI vice president for investor relations Marti Atienza said the firm would close stores with a total area of 10,000 square meters across all categories and brands, but it will also open stores with a total of 5,000 square meters.

“In those smaller markets, we think it might have been too early for us to open a lot of stores there," Atienza said referring to the shutting down of stores CDO, and cities of Zamboanga and General Santos.

"Thus, we decide to close down some of them, while at the same time open stores which will be mainly in central developed areas such as Metro Manila and Metro Cebu,” she added.