The operator of the nation’s second-largest drugstore chain, Cosmed (康是美), yesterday said that its investment in upgrading stores poses limited impact to its profitability and it expects annual sales to hit NT$10 billion (US$320.54 million) next year.
President Drugstore Business Corp (統一生活事業), which is to have 369 Cosmed stores nationwide by the end of this year, started upgrading stores earlier this year as it aims to enhance customer experience by offering more space for prospective buyers to try out skincare and cosmetic products.
“Basically, customers buy more when they spend more time in a store, allowing our new-generation outlets to generate higher sales than before, ” President Drugstore president Martin Chang (張聰本) told a news conference in Taipei.
The company has remodeled 25 Cosmed stores so far this year, Chang said. Along with an increase in sales to Chinese tourists, the drugstore chain has seen its average customer spending overall climb by 10 percent year-on-year, he added.
As a result, the company might see annual sales this year show a more than 10 percent growth from last year to nearly NT$10 billion, before possibly breaking the NT$10 billion mark next year, Chang said.
In the first three quarters of the year, President Drugstore reported nearly NT$7.1 billion in sales, an increase of 12 percent from the same period last year, data offered by the company showed.
Chang said the company aims to upgrade all its Cosmed outlets in the next three to five years, which would raise its capital expenditure, as remodeling a store generally costs about NT$2.5 million.
However, the investment to upgrade 25 Cosmed stores this year appears to have had limited impact on President Drugstore’s profitability, as the company still posted a net income of NT$220.39 million from January through September, up 5.93 percent from the NT$208.05 million it recorded in the same period last year, according to company statistics.
Chang attributed the strong performance to the company’s strategy of slow expansion and shutting down outlets with lower profitability.
The number of Cosmed outlets has only increased by 12 stores this year, and the company aims to maintain a similar rate of expansion next year.
The company does not plan to expand the number of stores to 400 anytime soon, Chang said.
President Drugstore, a subsidiary of President Chain Store Corp (統一超商), has 2.7 million members, which account for about 70 percent of the Cosmed chain’s sales.
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