Fawaz Alhokair expects 70 new showrooms by 2021 end, e-sales to reach 8% in 3 years: CFO

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Ahmed Al Belbesy, Chief Financial Officer (CFO) of Fawaz Abdulaziz Alhokair Co. expects 70 new showrooms to be opened before the end of this year, including new and old brands that support the company's strategy and trends, Al-Arabiya TV reported.
 

The company's strategy during the past seven quarters aimed to re-evaluate showrooms, brands and the countries in which it operates, Al Belbesy said, indicating that the pandemic led to the realization of this strategy in a larger way.
 

Under this strategy, 600 unprofitable showrooms were closed and 300 others were opened during the past seven quarters, with net closures of 300 branches until the end of the last quarter. This led to improving the company's profitability in the first and second quarters ended in September.
 

Al Belbesy also indicated that, with regard to the six-month period ended last September, 11 branches were opened with regard to the food industry, which represents 10% of the company's revenues, while 66 branches were closed in the clothing business, which included branches that incur losses or do not add returns.
 

He pointed out that the pandemic helped the company shift to e-commerce, as its sales during the past six months were equal to those of the same period last year, which were mostly online.
 

E-sales currently stand at 4-5% of Alhokair’s total revenues, said the CFO, expecting these sales to reach 7-8% during the next three years. He also stressed that the company has a strong and clear plan to support this growth, as it allocated part of the proposed capital increase to support this growth.
 

There has been a change in consumer behavior coupled with strong demand during the current quarter. With easy access to stores, thanks to easing the restrictions imposed due to the pandemic and the presence of shops and branches that do not pressure profitability, the company will be able during the next six months to maintain profit at an equal or higher level, according to the official.
 

Fawaz Alhokair swung to a net profit of SAR 22 million for Q2 ended Sept. 30, 2021, against a net loss of SAR 99 million in the year-earlier period, according to Argaam's data.
 

The company’s board of directors recommended, in a meeting on Nov. 10, a 46.2% capital cut from SAR 2.1 billion to SAR 1.1308 billion. The move aims to restructure the company’s capital to offset accumulated losses.