JEDDAH: Saudi retail group Fawaz Abdul Aziz Alhokair Co. reported a 408 percent year-on-year rise in online sales in 2020, while it posted a smaller loss overall in the final quarter of its fiscal year, as revenues began to recover from the coronavirus disease (COVID-19) pandemic, its full-year net loss widened by almost two-thirds.
The retailer reported that in 2020 total online sales stood at SR218.2 million ($58.19 million).
“We are pursuing increased digitization and strengthening our e-commerce offer by bringing more brands online.
Our strategic acquisition of Vogacloset was a critical step in transitioning the business to an omnichannel footing, building a genuine lifestyle retail proposition,” Marwan Moukarzel, CEO at Alhokair, said in a press statement.
In March, it was announced that Alhokair had partnered with shopping center operator Arabian Centers Company to buy a combined 51 percent stake in UK-based e-commerce platform Vogacloset, in a deal valued at around SR68.9 million.
Despite the surge in online sales, annual revenues for the fiscal year ended March 31 amounted to SR4,232.5 million, a decrease of 20.8 percent year-on-year, resulting in a net loss of SR1,110.3 million, a 63 percent increase from a net loss of SR681.2 million the year before.
As the retail sector has begun to recover from the economic impact of the pandemic, the fourth quarter, ended March 31, saw total revenue decline 4.4 percent to SR1.132 billion and a loss of SR348 million, compared to a loss of SR915 million in the fourth quarter of 2020.
“This financial year presented extraordinary challenges that no market was prepared for, creating one of the most challenging retail operating environments in living memory,” Moukarzel said.
“Although a difficult period, which saw sales decline year-on-year in all segments, Saudi retail began to show signs of recovery as COVID-19 restrictions eased, with an improved trajectory in the third and fourth quarters. Meanwhile, international operations in key markets suffered for the majority of the year as COVID-19 related restrictions and closures persisted, and we only started to see easing in April 2021,” he added.
In terms of physical stores, the report said that while 84 new stores were opened between April 2020 and March 2021, 235 outlets were closed, meaning its overall retail portfolio declined by 141 stores.
In March, Moukarzel told Arab News he plans to move forward with the company’s ambitious expansion plan, aiming to open around 57 food and beverage outlets in the next 12 to 16 months and at least another 50 retail stores in the fashion, cosmetics, beauty and sports sectors.
International operations generated revenues of SR550.9 million in 2020, a decline of 42.8 percent, due to store closures around the world due to the pandemic. The financial report stated that the retailer was in talks with a serious buyer to exit its US operations and was hopeful to conclude the sale by September 2021. It also stated it plans to exit its Balkan operations, “thereby terminating exposure to noncore, nonperforming international assets,” the report said.
