Strong sales in Malaysia and Indonesia have buffered electronics and furniture retailer Courts Asia from Singapore’s retail downturn.
The company has reported a 19 per cent increase in quarterly profit, to S$6 million in the three months to June.
“Our Malaysia business has seen improving profitability with the success of our credit campaign, whilst the Singapore business is still being impacted by the soft retail environment,” group CEO Terry O’Connor said in the earnings statement.
The Malaysian success will no doubt surprise shareholders and retail analysts given the nation experienced a sharp downturn in retail sales when the goods and service tax was imposed on April 1.
“For Malaysia, we remain cautiously optimistic on the medium-term outlook. With the Goods and Services Tax implementation underway for several months now, we expect consumption habits to normalise over the next three to four quarters, though the recent weakening of the ringgit may pose some short-term challenges,” he added.
The ringgit has slumped from 3.5 to USD1 to 4 in less than six months.
Malaysia accounts for 35 per cent of Courts’ sales, its Singapore home market 63 per cent.
Indonesia, accounting for the remaining two per cent, is Courts’ newest market. It has three stores operational now with a fourth due to open by December.
Looking forwards, O’Connor said he expected consumer sentiment in Singapore to remain subdued over the short term.
