Poya Co Ltd (寶雅國際), which operates 78 retail outlets selling cosmetics, lingerie and stationery in Taiwan, is planning a steady expansion in store numbers over the next few years, citing a large, untapped potential market in the nation.
The retailer has a strong brand presence in central and southern Taiwan, where two-thirds of its stores are located.
As Poya has already achieved economies of scale in these areas, the retailer aims to increase the number of its Poya Living Mart (寶雅生活館) outlets to 90 by the end of this year to widen its lead over local peers, a company official said last week.
“The company is able to open a store generating revenues of about NT$100 million [US$3.33 million] a year for every 40,000 local residents,” Poya vice president Simon Shen (沈鴻猷) told an investors’ conference on Wednesday.
According to company estimates, Poya could operate as many as 575 outlets in Taiwan (which has a population of 23 million), Shen said, adding that the company estimates there is about NT$28 billion of revenue in untapped markets.
Therefore, Shen said the company aims to open more than 10 outlets per year, increasing the total number of its outlets to 126 by the end of 2015.
The planned expansion may further increase the company’s profitability, as its data shows Poya can start generating income in the second month after opening a store in central or southern Taiwan, he said.
The company also plans to enhance its regional presence in northern Taiwan, although outlets opened in this area tend to attract higher rental fees. However, Shen said the company is still able to reach the break-even point between three and six months after opening stores in the north.
Poya offers about 30,000 to 40,000 consumer products, catering mainly to young female shoppers, students and housewives.
The retailer generates most of its revenue from cleaning products, cosmetics and other daily necessities, with an average unit price of NT$74. Average customer expenditure was about NT$370 per store visit over the past three years, company data showed
The company said it would also continue introducing “new-style” stores, which have innovative layouts and feature more high-margin products aimed at women, as it aims to enhance the company’s brand image and create a customer-friendly environment.
Poya plans to increase the number of these new-style stores to about 20 this year from five currently, Shen said.
During the first three months of the year, Poya reported NT$167.9 million, or NT$1.83 per share, in net profit, up from NT$126.56 million, or NT$1.39 per share, a year ago, the company said in its financial statement.
Consolidated revenue stood at NT$1.64 billion in the first quarter of the year, up 9.33 percent from the NT$1.5 billion posted the previous year, company data showed.
Revenue contributed from customers with loyalty cards accounted for 60 percent of the company’s revenue, with members standing above 3 million, Poya’s data showed.
The firm’s board of directors has approved a proposal to distribute a cash dividend of NT$4.1 per share and a stock dividend of 0.01 percent — or 10 shares per 1,000 shares held — to shareholders this year.
Poya is scheduled to hold its annual general meeting on June 11.
Shares of Poya ended at NT$125 on Friday, up 1.21 percent from the previous session and rising 65.56 percent since the beginning of the year, data from the GRETAI Securities Market showed.