The Gaisano-led Metro Retail Stores Group, Inc. (MRSGI) reported a net loss of P421.87 million in the first nine months of 2020 as the coronavirus pandemic shut down department stores for several months, and disrupted customer traffic and consumer spending.
To cope with the market upheaval and position for the new normal, the company set aside P396.4 million to rationalize its store network and rightsize its workforce as well as streamline operations over the next 12 months.
The Metro store in Ayala Fairview Terraces has been reported to have shut down.
The company, on the other hand, hopes to increase market reach through digital channels.
To complement its physical stores, MRSGI launched version 2.0 of its online store and mobile commerce services, with more participating stores and a wider range of products as well as a much improved online shopping experience.
The net loss from January to September 2020 was a reversal from the P398.19 million net income recorded in the same period of 2019.
In a statement on November 13, 2020, the company said its revenues declined 12.1% to P22.22 billion from the P25.28 billion in January-September 2019.
Its general merchandise business dropped by 47.1% year-on-year as the quarantine restrictions shut down department stores and other non-essential businesses.
Only MRSGI’s supermarkets were operating during the months of stringent quarantine restrictions.
As a result, blended same store sales contracted by 16.6% over the same period in 2019.
But sales of the company’s food retail business grew by 5% over the same period in 2019 due to increased demand from enhanced focus on supermarket stocks and quarantine measures.
The company also said it booked one-time cost provisions for store network and manpower rationalization programs, as roadmaps to better profitability.
Despite these, EBITDA (earnings before interest, taxes, and depreciation & amortization) as of end-September remained solid at P1.1 billion.
But net income after tax decreased by 206% over the same period last year.
Nonetheless, the company’s liquid position allowed it to declare cash dividends in the total amount of P205.76 million last May 2020.
Manuel Alberto, MRSGI president and chief operating officer, said they will focus on stabilizing the business and “make the right investments” to respond to the market upheaval and position the company for the new normal.
“Given the changes in the retail landscape, we will head towards transforming MRSGI into an organization that is resilient, relevant, and responsive to the changing consumer dynamics,” Alberto said.
He said the rationalization of its store network and rightsizing of its workforce as well as streamlining of its operations are intended to improve profitability and merchandise reach.
Meanwhile, MRSGI will push through with a joint venture with the Province of Samar to establish a new mixed-use commercial center in Catbalogan City.
Envisioned to stimulate the local economy and provide livelihood opportunities to residents, the development will contain a mall and retail space that will house the Metro Department Store and Supermarket. (Ventures Cebu)