ROBINSON SALES GROWTH REBOUND

Even if product prices rise, Robinson gains from revenue-sharing with manufacturers, says Mr Preecha.

Improved consumer purchasing power has revived department stores, which have been hit hard by competition from discount stores in the recent past.

Preecha Ekkunagul, the president of Robinson Department Store Plc, said higher crop prices, minimum wages and civil servant salaries were driving consumption, even as employment rises.

At the same time, Bangkok residents are spending more on lifestyle items such as fashion, electrical products and consumer electronics and furniture. The momentum started last year, leading Robinson to steady growth.

If there are no new political problems and the country's economy keeps growing, he expects consumers will buy more premium products at department or specialty stores instead of making purchases at hypermarkets or convenience stores.

Mr Preecha does not believe inflation locally is that high, but even if some some manufacturers do increase their retail prices, Robinson will still gain from more revenue-sharing because of the consignment arrangements it has.

As urbanisation grows in the provinces, Robinson expects to open another 20 department stores across the country in the future.

The number of Robinson stores is forecast to reach 26 this year, increasing to 30 in 2012 with the launch of new outlets in Suphan Buri, Surat Thani and Bang Na and Bang Khae districts in Bangkok.

First-quarter sales of Robinson grew by 15.6% to 4.1 billion baht. Its net profit was 385 million baht, up 24.3% year-on-year.

"We are happy with our performance in the first quarter and the increasing sales momentum is continuing into May," Mr Preecha said.

The strong performance came from 12.6% growth in sales from existing stores and higher spending per visit. Sales of premium cosmetics and international fashion brands surged because of more product offerings and price ranges, and extended brand activities to attract new customers. The company plans to spend 250 million baht this year for store facelifts in Phuket, Chiang Mai, Udon Thani and Rangsit.

Robinson shares (ROBINS) closed on the Stock Exchange of Thailand on Friday at 30.50 baht, up 50 satang, in trade worth 26.49 million baht.