December 22, 2012, 6:27 pm
The Singapore-based Parkson Retail Group now owning 45% of Odel has indicated that it sees Odel as potentially providing a springboard into most other markets in Sub Continental Asia, EUROWEEK has said in an article on Sri Lanka in the Capital Markets in its December issue.
Citing Parkson’s acquisition of a major stake in Odel as a recent example, the article says that across-the-board rise in per capita income and consumer spending power has been an important driver of foreign direct investment inflows into Sri Lanka.
Originally established in 1990 with a single store in Dickman’s Road by Otara Gunewardene, who retains a substantial slice of the company and remains its head, the company has rapidly expanded into a chain of 17 retail outlets.
EUROWEEK says that the company principally targeted middle to upper income consumers and focused originally in ladies clothing. It has since expanded into a wide range of household goods as well as jewellery and souvenirs.
"The strength and visibility of the Odel brand was underscored in July 2010, when an IPO of 11.5% of the company’s equity chalked up a new record for the Colombo Stock Exchange (CSE) with an oversubscription level of almost 64 times," the article said.
It quoted Gunewardene saying that since the end of the war, the group had seen a sharp increase in revenue driven by a rise in consumer income as well as the tourism boom.
"A large number of customers who visit our flagship store in Colombo are tourists, and our store in the departure lounge at the airport has also been supported by the strength of the tourism industry," she has said.
She had described Parkson’s investment in Odel as a significant vote of confidence in the prospects for the Sri Lankan economy.
Parson Retail Asia – which was listed on the main board of the Singapore Stock Exchange in November 2011 – has an extensive network of 534 department stores in Southeast Asia. Parkson Retail Group, meanwhile, which is quoted in Hong Kong, operates a chain of stores throughout China.
Parkson which originally took 42% of Odel increased it to 45% in a recent mandatory offer following the acquisition of the major stake. A rights issue injected USD 20 million funding into the business which will be used for further expansion.
"We already have about 120,000 square feet of retail space and we are now looking to expand this significantly over the next few years," says Gunewardene. "Adding new capacity will allow us to widen our offer to our customers both with our own brands and by bringing more international brands into Sri Lanka."