Mohammad Alsaif, CEO of Alsaif Stores for Development and Investment Co.
Alsaif Stores for Development and Investment Co. has passed the worst in the market, CEO Mohammad Alsaif told Argaam in an interview, adding that his company eyes growth by breaking into new complementing sectors and opening branches in new regions.
The company has great growth opportunities, Alsaif added, expecting robust sales growth going forward driven by the company’s entry into the large home appliances sector, such as air conditioners, refrigerators, ovens and TVs, given that it complements the company’s business.
These appliances will be Alsaif-branded. The company seeks to deploy large home appliances in more than 40 branches by the end of Q1 2024 and in most stores by the end of the second quarter, the CEO said, expecting entry into this market to raise the average invoice per customer. He also expects higher brick-and-mortar and online sales, backed by Alsaif’s branch network.
Alsaif’s growth will be also propelled by the performance of new openings, which need up to six months to be fully known by customers.
Commenting on Q3 2023 financial results, Alsaif said the figures were hurt by a nearly 10% decline year-on-year (YoY) in sales despite better profit margins, in addition to a 32% YoY increase in selling and marketing expenses, due to non-recurring marketing expenses arising from openings and promotion for new stores in Kuwait and the UAE, as well as some new branches in Saudi Arabia. Increased expenses related to the cost of finance lease contracts in accordance with IFRS 16 also weighed on the company.
Alsaif has 68 showrooms in Saudi Arabia, Kuwait and the UAE. A new addition is expected in Oman by the end of Q4, in addition to other three in Q1 2024.
The CEO shrugged off plans to close any company branch, as all branches make profits at various rates. The entry into the large home appliances industry will bolster branch performance and raise sales per square meter.
Alsaif holds a 27% share in small appliances market and nearly 40% in the home utensils market. The company aims to garner a solid market share in large home appliances, expecting to start operations in early 2024.
Like peers, the company seeks to boost its market share especially amid economic headwinds.
Further, the CEO said Alsaif’s loss leader strategy was adopted between 2012 and 2015, when the company did not have a brand for its own. It depended on local suppliers, while profit margins were weak.
The company can control prices as around 8%% of the products sold in its showrooms are Alsaif-branded.
Alsaif reported a net profit of SAR 81.1 million for the first nine months of 2023, down 20% compared to SAR 101.7 million in the year-earlier period. The third-quarter net profit dropped 45% year-on-year (YoY) to SAR 15.3 million, Argaam reported.
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