FPT Shop closes 36 stores

FPT Retail, a leading digital retail company, recently reported a consolidated pre-tax loss of 97 billion VND for the fourth quarter of 2023. For the full year of 2023, FPT Retail accumulated a pre-tax loss of 294 billion VND.

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Despite being in the red, FPT Retail’s FRT stock still had a significant increase in value to 108,500 VND per share.

The strong breakthrough of FRT stock could come from investors’ expectations of the growth potential of the Long Chau pharmacy chain. In the fourth quarter of 2023 alone, Long Chau’s revenue grew by 60%, becoming the main driving force behind FPT Retail’s consolidated revenue, which recorded the third consecutive positive growth, reaching 8,690 billion VND.

FPT Shop retail system

The loss in the quarter of 2023 was primarily explained by FPT Retail due to the emergence of business efficiency bonus expenses, opening about 100 more pharmacies compared to the set target at the beginning of the year, near-date cancellation costs of Long Chau, the costs of closing 36 inefficiently operating FPT Shop stores were fully recognized in the fourth quarter, the costs of investment in vaccination center and digital transformation were also recognized.

Experts believe that FPT Retail’s 2024 profit could reach 439 billion VND thanks to the recovery of FPT Shop’s profit and the continuous improvement of profit from the Long Chau pharmacy chain through new openings and increasing profit margins.

Last month, The Gioi Di Dong also reported on the comprehensive restructuring process of this retail system. Accordingly, The Gioi Di Dong focuses on maintaining core activities, chains, stores, and sectors that create value for the company in the present or near future. Reviewing and eliminating waste, the company will stop unnecessary activities and postpone investment for medium and long-term R&D projects in this stage.

The Bach Hoa Xanh, An Khang, and AVAKids chains have completed the review and closure of stores in November 2023. With The Gioi Di Dong, Dien May Xanh, and Topzone chains, the company has closed nearly 150 stores in October and November 2023 and will continue to close some low-revenue and low-profit stores in December 2023 to stabilize operations and prepare for the peak selling season of the Lunar New Year.

SOURCEcafef
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