Wednesday , May 29 2024

Mobile World Group restructure sees 150 stores closed


Mobile World Group shut down 150 The Gioi Di Dong, Dien May Xanh and TopZone stores in October and November as part of its comprehensive restructuring.

It left the company with 1,100 The Gioi Di Dong and TopZone electronic retail stores and 2,210 Dien May Xanh appliances stores.

But in December it plans to close more underperforming stores to prepare for the Lunar New Year (Tet) holidays in February 2024, traditionally a major sales period.

The company’s chairman Nguyen Duc Tai had announced plans to close around 200 unprofitable stores in the last quarter of 2023 at a meeting with shareholders in November.

He said the firm would benefit from lower operating costs while revenues would merely “move from one store to others.”

The company has also been restructuring its warehousing and logistics operations, keeping only those that offer it value.

With the restructuring, MWG hopes to boost its market share, revenues and profits in 2024.

In the first 11 months of 2023 revenues from The Gioi Di Dong and Dien May Xanh, its main sources of income, decreased by 21% year-on-year to VND76.7 trillion.

Bach Hoa Xanh, MWG’s supermarket chain, stood out as a bright spot for the retailer, with its 11-month revenues rising by 16% to VND28.4 trillion (US$1.13 billion).

On average, each Bach Hoa Xanh store had revenues of VND1.75 billion, or VND250 million short of break-even, according to MWG’s estimation.

Bach Hoa Xanh has wrapped up its own restructuring, closing 400 stores and retaining 1,697.

MWG’s total revenues in the first 11 months were down 13% at VND108 trillion.

That represented 80% of its target of VND135 trillion, meaning it has to make up the remaining 20% in December.

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