Indonesian Zara, Starbucks, Burger King Franchiser to Expand

Francezka Nangoy

Mintra Adiperkasa (MAP), franchiser of brands like Zara, Starbucks and Burger King, is broadening its fashion and sport lines in Indonesia, betting on strong consumer spending despite concerns that an increase in fuel prices will stoke inflation and curb economic growth.

Fetty Kwartati, corporate secretary at MAP, on Wednesday said that the company is planning to have as many as 10 new brands this year after getting seven brands last year.

The focus on fashion and sport brands this year is a result of “the most dynamic growth nowadays” in the country, she said.

This year, the company has opened an outlet for underwear line Spanx, and clothing line DKNY, Fetty said. The new brands, though, will come from Europe, the United States and Australia, she said, declining to identify those except Spanx and DKNY.

Last year’s line of new brands included Bershka, Stradivarius, and Mango men’s clothing line called HE Mango.

The “specialty store” segment — which covers fashion, sport and lifestyle lines — had Rp 3.53 trillion ($385 million) in revenue, which accounted for 60 percent of MAP’s total revenue.

Its department stores, Sogo, Debenhams and Seibu, contributed 25 percent to revenue, while the food and beverages segment —which counts Domino’s Pizza among its seven brands — were responsible for 12 percent. MAP’s bookstores and gift shops accounted for the rest.

The company is setting aside Rp 600 billion in capital expenditures, which will be financed internally, to expand its outlets as well as for maintenance on its old outlets. It will open 60,000 square meters of retail space, equal to about 250 to 300 shops. It has 1,062 stores across Indonesia.

MAP’s 2011 net income increased 79 percent to Rp 360 billion from a year earlier, while revenue rose 25 percent to Rp 5.89 trillion, the company announced on Wednesday. Its same-store growth was 14 percent last year, faster than its 10 percent growth in 2010 and surpassing its 10 percent target.

The company is setting a moderate growth target at 20 percent to 25 percent in revenue and net income growth of “at least the same as revenue growth”, she said. MAP’s business can be affected by fuel prices through freight and distribution costs, but those can be passed on to its customers, Fetty said.

“Our target market is middle to upper class, which are not very sensitive to price increases. I don’t think the impact of inflation would be very significant to our sales,” she added.

Indonesia’s income per capita last year reached $3,543, according to the Central Statistics Agency, from $3,010 in 2010.

Fetty said, citing Nielsen Indonesia, there are 30 million people in Indonesia, categorized into middle and upper class.