"IT COULD have been worse," Courts (Jamaica) Limited managing director Hayden Singh said of the company's second quarter. During the September quarter the company had to come to grips with two hurricanes in an economy already under restrictive monetary controls.
"We were in a very tight
economic environment with wage restraints," Mr. Singh told stockholders at the company's recent annual general meeting at its Constant Spring Road, St. Andrew branch.
"Given the rate of inflation and the memorandum of understanding signed by the Government and State sector trade unions at the start of the year, the purchasing power of potential Courts customers will have been eroded. This would lessen demand for its goods."
In the first quarter ended June 27 of this year, Courts had a turnover of $1.24 billion. This was a three per cent increase over the level for the similar quarter last year.
AGGRESIVE ADVERTISING
"Consumers were reluctant to take on additional debt," said
the managing director. "Then Hurricane Charley devastated some southern parishes in August, pushing up food prices in the second quarter. Additionally, the price of petroleum has risen dramatically."
With Hurricane Ivan following in September, "our stores suffered minimal damage," he said. "We had a very rapid recovery."
In the second quarter turnover was "flat", he said, but "we will still make a profit. For the third quarter, our trading has met our expectations... We have a very aggressive advertising and promotions campaign."
To operate successfully in the current environment, "You need to make your products more affordable," he said. "You must take existing products and sell them in a different way."
Despite this, "Margins have gone up in the current financial year," he said.
To protect itself Mr. Singh said, "We are constantly reassessing our credit system. And sales have started to recover from the second quarter."
The recover may be partly due to customers replacing goods damaged by Hurricane Ivan, but it is also partly due to the new marketing programme.
The company implemented its Cash and Go concept in some additional stores and this will be rolled out in remaining branches on a phased basis. With Cash and Go, the customer can buy a product and take it directly from the store as opposed to purchasing the product and awaiting delivery.
While continuing to refresh its furniture range, there has been increased emphasis on the sale of electrical items. And difficulties shipping freight from its traditional Brazilian suppliers forced the company to start sourcing more of its goods from China, Mr. Singh explained.
