And its luxury sales outlets could face pressure from a government plan to raise taxes on imports of luxury goods to narrow a near-record current-account deficit. Some Mitra stores, including fast-food franchise outlets Burger King and Domino Pizza, are loss-making and will continue to hurt its balance sheet, according to four analysts who track the company closely. "Now the store is only crowded on weekends," said Heru Triyanto, a Noe employee. And at the female shoe store, Noe, turnover has steadily dropped. Managers at three out of four of its shops told Reuters sales were down since it opened in May.Īt the French luxury clothes store, Yves Saint Laurent, sales have fallen as much as 8 percent in the last few months, said Sinta Ningsih, a sales manager. high-end French department store in central Jakarta, underscores her point. "We decided to slow down a bit after the heavy expansion this year."Ī stroll through Mitra's sleek Galeries Lafayette, a new 12,500 sq. Mitra is targeting revenue growth of 20 percent next year, down from 25 percent in 2013, and reducing capital spending for next year, Kwartati said. Another 244 will be opened this year but next year's plans will be scaled back. In the first five months of this year, Mitra opened 106 new stores. So, too, has its debt, which has risen five times since 2011. Mitra imports 50 percent of its merchandise and passes those costs to customers, the wealthiest of whom can absorb 10-15 percent price increases, says Kwartati.Īs Indonesia's middle class grows, Mitra has expanded. Profitability, she said, is down as rising operating expenses exceed revenue growth. "We have felt the cost pressure ever since the first quarter," said Fetty Kwartati, Mitra Adiperkasa corporate secretary, in an interview. Federal Reserve signals an end to easy money. Foreign investors are in retreat as the U.S. Jakarta's main stock index is off 19 percent in the past three months, as economic growth slows and demand slackens for Indonesia's commodities exports, especially from China. On Thursday, the central bank announced a half-percentage point increase in benchmark interest rates to defend a currency that has nose-dived nearly 13 percent this year. But personally I bought fewer things than last year for example."Ī near-daily procession of grim statistics doesn't help.ĭata on Monday showed the trade deficit widening to a record high of $2.31 billion in July and inflation quickening to a four-and-a-half year high of 8.79 percent in August. "We usually give a little money or clothes or toys to our nieces and nephews during Eid, it's the tradition. "Prices have gone up, but our incomes have stayed at the same level," said Misnah, a 25-years old woman shopping in a Jakarta store, who like many Indonesians goes by one name. Years of surging palm oil, coal and tin exports brought an influx of foreign investment and ignited a domestic consumption boom in the country of 250 million people.īut as the economic tide turned this year and Indonesia's financial markets swooned, shoppers began to pare back.įriends and family were showered with fewer gifts, for instance, in the recent Eid al-Fitr holidays, the biggest festival in the world's largest Muslim country that is marked by lavish feasts, family gatherings and generous spending. Such talk was unheard of a year ago when Indonesia was minting dollar millionaires at a rate of 16 a day, according to consulting firm Capgemini, giving it the fastest-growing ranks of millionaires in Asia.
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