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SSI earnings up as it shuts stores

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EARNINGS of SSI Group, Inc. rebounded last year on resilient customer demand and improved operating efficiencies even as the country’s largest specialty store retailer continued to shut down stores and reduce the brands in its stable.

In a disclosure to the stock exchange on Friday, the Tantoco-led firm said it generated a net income of P275 million last year, up 19% from P232 million a year ago.

This marked a reversal of the 71% drop in profits in 2016 from P810.70 million in 2015.

Core recurring income increased 12% to P652 million from P581 million, excluding write-offs related to the group’s store rationalization program, the FamilyMart and Wellworth businesses, and expiring net operating loss carry overs.

Revenues were flat at P18.6 billion from P18.44 billion though this topped expectations considering the highly competitive environment, weakening peso, and the ongoing rationalization program that focuses on improving the overall sales quality and operating efficiency of the group’s store network, SSI said.

At the close of 2017, SSI was operating 638 stores covering more than 129,486 square meters, down from 708 stores spanning 138,852 square meters.

The company maintains a portfolio 108 brands — compared to the 114 brands in 2016 — after adding Estée Lauder and Good Eats and dropping eight brands during the year.

SSI enjoyed “healthy” demand in the fourth quarter, a trend that continued into the first three months of 2018.

“Resilient consumer demand combined with the Group’s strengthened store network and increased operating efficiencies were the drivers of the Group’s turnaround in 2017. We expect that these same factors will continue to drive our growth in 2018,” SSI Group President Anthony T. Huang was quoted in a statement as saying.

SSI now operates six e-commerce websites to ride the e-commerce wave that has triggered the closure and bankruptcy of major retailers in the United States.

Shares in SSI went up by a centavo or 0.39% to settle at P2.59 per share. — Krista Angela M. Montealegre