SSI Group Net Income Down 36% in First Quarter Due to Impact of COVID-19

The SSI Group posted a decrease in net income for the first quarter of 2020, largely because of the impact of the coronavirus pandemic. 

In a disclosure to the Philippine Stock Exchange, the specialty retailer posted a net income of P110 million, a 36 percent drop from the same period in 2019. Total sales for the first three months of 2020 reached P4.3 billion, down 13 percent from the same period last year.

“The operations of SSI Group during the first quarter of 2020 were impacted by the COVID-19 health crisis and the Enhanced Community Quarantine (ECQ) declaration that caused the temporary closure of the Group’s brick-and-mortar stores beginning March 16,” the company said. “While brick and mortar operations resumed on June 1, first quarter sales and net income declined as a result of the closure of stores throughout the second half of March.”

The company also said its ecommerce sites zara.com/ph, lacoste.com.ph, gap.com.ph, bananarepublic.com.ph, beautybar.com.ph, lush.com.ph, superga.ph and dunelondon.ph continued to take orders during the second half of March, with fulfillment of orders and full operations resuming on May 15. 

SSI is the country’s largest specialty retailer, with nearly 100 brands across different categories (apparel, accessories, footwear, home and personal care), and over 500 stores. SSI’s portfolio of brands includes some of the world’s most well-known fashion houses such as Calvin Klein, Lacoste, Prada, Zara, Tory Burch, Massimo Dutti Buberry, Givenchy, and Michael Kors.

All of its stores were closed starting March 16 at the start of the ECQ and reopened on June 1.

The company said it registered “healthy growth” of 12 percent year-on-year in January and February prior to the COVID health crisis.

“In mid-March, in compliance with the government’s ECQ directives, and in order to safeguard the health and safety of the company’s employees and customers, the Group closed its brick-and-mortar stores and head offices and stopped fulfillment of ecommerce orders.” 

“The Group faces extraordinary operating conditions as a result of the COVID

19 pandemic,” said Anton Huang, SSI Group president. “However, we believe that our brand portfolio, our strategic store network and our core customer base will prove to be resilient throughout 2020. We are also enhancing our customers’ ability to shop from home by continuing to expand our ecommerce business, with the opening of marksandspencer.com.ph in May, and several more ecommerce openings planned over the rest of the year. 

“During these unprecedented times we will be utilizing the financial gains achieved in 2019 in a prudent manner to address the challenges brought about by COVID-19,” he added. “We look forward to the gradual recovery of our operations as the country begins to reopen and build on the gains made so far in the struggle against the COVID health crisis. We are encouraged by the performance of our brick-and-mortar stores, which have seen steady increases in weekly sales since reopening on June 1, while our e-commerce revenues have more than doubled since fulfillment of orders restarted on May 15.” 

In 2019, the Group generated sales of P22.4 billion, an increase of 11 percent year-on-year. Recurring income inclusive of the impact of PFRS 16 (Philippine Financial Reporting Standards), Leases, was at P920 million, an increase of 27 percent year-on-year, while net income, inclusive of the impact of PFRS 16, was at P815 million, an increase of 35 percent year-on-year.