Economy has dipped and spending power eroded, says ODEL chairman
View(s):ODEL, now under the Softlogic umbrella and speeding ahead with the latest acquisition of the Cotton Collection business to become the largest clothing retailer in Sri Lanka, had a ‘fulfilling’ year in 2017-18, according to company chairman Ashok Pathirage.
In his annual report released this week, he said the company’s expansion plans were implemented seamlessly, offering customers greater access to a wide range of new international brands in more spacious retail spaces. “All our actions are underpinned by the knowledge that the under-construction Odel Department Store is edging closer to becoming a reality. Our sights are squarely trained on a two to three-year window, by which time we have full confidence that our investments will mature and our objectives will be met,” he said.
“While we have total faith in our ability to deliver on promises made to our customers, we had to contend with minor road-blocks along the way such as the macro economic slowdown and downturn in consumption, which characterised the 2017/18 financial year. There is no doubt that a dip in economic growth and spending eroded profitability levels hitherto enjoyed by the retail sector in the past few years, however, Odel’s distinct market positioning continues to attract a steady stream of clientele,” he said.
Revenue for the year rose by 7 per cent to Rs. 7.4 billion but post-tax profit fell sharply by 57 per cent to Rs. 199 million. Finance costs rose during the year due to the downturn in the retail sector, high interest rate regime and stock turnover being less than desirable. With an improved outlook for the economy in 2018, growth in retail is expected to pick up, he said.
The ODEL chairman noted that many more brands will evince interest in entering Sri Lanka’s retail sector once they see the presence of international retail venues.
“The country has lost out on income from tourist spend due to a lack of upscale shopping and recreational destinations in the island, which is why the construction of high-end international class malls will prove to be the much required magnet for tourists. They look for high-end retail spaces and Odel, along with the other large malls will become a hub for tourists looking for international brands at competitive prices. With 2.5 million tourists expected in 2018, there is much potential for the year ahead and beyond,” he said.