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Tuesday, March 31, 2009

Suria KLCC eyes 5pc growth in retail sales

AMIDST the gloomy outlook of a weakening economy and dampened consumer sentiments, one of Kuala Lumpur's shopping bright spots, Suria KLCC, expects total retail sales to grow for the 11th consecutive year.

The premier shopping centre, housing 330 specialty stores within the 1.04 million sq ft of retail space, hopes to grow total retail sales by up to 5 per cent to about RM2.1 billion this year.

The growth, though small compared to the 15 per cent in 2007, is still better than its marginal growth in 2008.

Retail sales were stable at Suria KLCC last year amidst lower traffic count as a result of an additional 2.9 million sq ft of retail space in the market (at the Pavilion Kuala Lumpur, The Gardens Mid Valley and Sunway Pyramid) and high fuel price.

Suria KLCC Sdn Bhd's chief executive officer Andrew Brien said this year's strategy is to get customers to stay longer and spend more.

"In 2008, we grew by a few percentage points to just over RM2 billion in sales, despite a 4.5 per cent drop in traffic (to 42.02 million) from 44 million in 2007. We have been able to maintain modest growth in what has been a challenging environment. This is a testament of our strength," he told Business Times.

In a previous interview, Brien had noted that the high growth experienced for two-and-a-half years (between mid 2004 and 2007) would be nearly impossible to sustain forever.

Suria KLCC is a 60:40 partnership between KLCC Property Holdings Bhd and ING Real Estate.

For the financial year ended March 31 2008, Suria KLCC registered RM232.3 million in revenue, representing a 8.2 per cent growth from RM214.7 million achieved in the previous year.

The 57 per cent urbanised Malaysian population and a higher level of job security, particularly for those in the Klang Valley as well as the high spending tourist crowd, also works in the mall's favour.

"If there has been a drop in tourists numbers we have not seen it. They still account for 20 per cent of our business as they are big spenders," he said.

He added that even rentals was not an issue at the mall. "If a mall is successful, rent is never an issue," he said, adding that Suria KLCC does not plan to cut its advertisement and promotion spending for 2009.

"We have a good team, a good product, and we want to make sure it remains great," he said.

Apart from investments to spruce up the mall, Suria KLCC has also remixed the retailers to drive sales. Some of the recent additions include Harrods, Ed Hardy, Mulberry, 7 For All Mankind and ck Calvin Klein Accessories.

By Business Times (by Vasantha Ganesan)

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