Leading electronics retailer The Gioi Di Dong (Mobile World – MWG) has said it might close 200 stores with moderate sales this quarter.
Its October income statement reveals plans to close the underperforming stores to optimize costs.
It said: “These are stores that have low sales and profit. We will be closely monitoring their performances to adjust appropriately.”
The company currently has over 5,600 stores, 1,158 of them belonging to electronic goods seller The Gioi Di Dong, 2,281 of them to appliances seller Dien May Xanh, 1,700 to supermarket chain Bach Hoa Xanh, and 540 to An Khang Pharmacy stores.
Mobile World chairman Nguyen Duc Tai mentioned the possibility of reducing the sizes of the The Gioi Di Dong and Dien May Xanh chains at a recent meeting with shareholders,
With demand expected to remain low until the economy recovers, it cannot afford to keep underperforming stores open, he told them.
“Many of MWG’s stores cannot even break even, their performance is much poorer than before.”
However, he claimed revenues would not be affected since they will merely “move from one store to another.”
Mobile World’s stores are densely distributed with some situated only a few hundred meters away from each other, he said.
Gross revenues for October were VND11,190 billion (US$446.3 million), the only month this year in which there saw year-on-year growth.
The Gioi Di Dong and Dien May Xanh contributed over VND7,800 billion, a 5% decline from a year ago.
But it was 8% higher than September sales thanks to the launch of the iPhone 15.
In the year to date the two chains’ revenues totaled VND70,200 billion, 21% down year-on-year.
But Bach Hoa Xanh’s revenues rose 13% to VND25,300 billion.
Its October, sales jumped 29% from the previous month to VND3,000 billion, or an average of VND1.7 billion per store.