Shaker Group adopts new measures to reduce cost, inventory

Saudi-based Al-Hassan Ghazi Ibrahim Shaker (Shaker Group) has adopted strategic cost optimization initiatives to lower costs, reduce inventory and increase freight consolidation, it said in a statement on Tuesday.

The company's inventory dropped 19.6 percent year-on-year (YoY) to SAR 598 million in Q2 2018, driven by a conservative approach to re-ordering and the liquidation of selected items. In addition, trade receivables fell 27.4 percent YoY to SAR 559 million, primarily due to a greater emphasis on collection before further sales.

“ This quarter we have reported lower expenses, which have been driven mainly by reduced employee costs and lower rental payments," said Azzam Saud Almudaiheem, chief executive officer, Shaker Group.

"Such reductions are the result of headcount optimization measures and rationalization of our outlet footprint. In a challenging market environment, we remain focused on improving our margins by operating more efficiently as a business."

Shaker Group is implementing Sales & Operation Planning (S&OP), to drive collaboration, focus and alignment across divisions and departments and has reduced its warehouses to four this year from 13 in 2017, the statement said.

Earlier this month, the company said its loss widened 59 percent to SAR 57 million for H1 2018, on the back of a drop in sales due to lower demand and spending on real estate and construction projects by expats.