Mainstream
Focus Point gets boost from higher tourist spend
Behonce Beh 
Focus Point Concept Store houses three optical retail brands under one roof
advertisement[x]

Strong tourist arrivals and spending, a growing contact lenses business and better demand for affordable eyewear have helped Ace Market listed eyewear retailer Focus Point Holdings Bhd turn in a better performance on the back of sombre sentiments in the retail industry.

Its CEO Datuk Liaw Choon Liang tells FocusM that the retail sentiment has been soft in the past few years owing to the growing dominance of e-commerce business.

“The retail industry, especially fashion apparels and accessories, has been badly hit by e-commerce with some retailers reporting a 20-30% drop in sales,” laments Liaw, who is also the immediate past president of the Malaysia Retail Chain Association.

Corporate sales will be a focus for the group, says Liaw

The company managed to return to the black with a small net profit of RM42,000 for the second quarter ended June 30 from a net loss of RM1.79 mil a year ago while revenue was slightly higher at RM40.49 mil versus RM39.1 mil.

It saw an improved performance from the food and beverage as well as the optical and related products segments.

For the six months just ended, Focus Point trimmed its net loss to RM315,000 from RM1.24 mil a year ago, despite posting lower revenue of RM81.12 mil from RM82.23 mil.

Liaw says the better performance in Q2FY17 was because it managed to reduce unnecessary overheads while introducing better margin products such as brands exclusive to Focus Point, namely Jaguar and Serengeti branded eyewear.

Its performance was, however, dragged down by the weak food and beverage business, namely its bakery brand Komugi.

“Most of our profits have been taken by our F&B business, which is struggling at the moment. We are trying to rectify this side of the business and have seen some improvement due to export opportunities,” he points out.

The company managed to reduce pre-tax losses from its F&B business to RM1.38 mil in the six months ended June 30 from RM2.85 mil a year ago, despite registering marginally lower revenue of RM7.74 mil versus RM7.89 mil previously.

On its share price performance, Liaw is not too concerned as share prices are “beyond our control and the volume trade is low.”

“We feel that achieving our bottom line is more important in order to generate good dividends,” he says.

About 70% of the company’s revenue still comes from its Focus Point optical operations, which has over 140 outlets nationwide.

The weaker ringgit, says Liaw, has made Malaysia an attractive shopping destination in the Southeast Asia region.

Though figures provided by the tourism ministry show tourist arrivals to Malaysia for the first six months of this year dropped to 10.81 million from 13.03 mil a year ago, they still provided a much needed boost to the retail sector.

“Our stores in Kuala Lumpur such as those in Suria KLCC and Pavilion Kuala Lumpur cater to a large tourist crowd from China and the Middle East.

“Stores in Johor Bahru, on the other hand, attract many Singaporean customers who leverage on the strong Singapore dollar to shop in Malaysia,” add Liaw.

 

New retail concept store

Earlier this year, Focus Point introduced the Focus Point Concept Store, a new retail concept that houses three of its brands, namely Focus Point, Eye Font and Whoosh under one roof.

This move is to streamline its existing range of eyewear store brands while reducing the need to have multiple outlets in one shopping mall.

“A typical optical store of ours would generally occupy 800 to 1,000 square feet,” explains Liaw, adding that the new concept store will occupy about 2,000 sq ft.

The first concept store opened earlier this year in Johor while the second outlet opened in Melawati Mall, Kuala Lumpur, in August.

Liaw says depending on location, it foresees replacing existing stores such as the one at Ikano Power Centre, Petaling Jaya, with the new concept store.

Each concept store would typically cost about RM1.3mil in capital expenditure, renovation and inventory.

Meanwhile, Whoosh, its in-house fixed price eyewear brand, has been well received by the public and currently has over 20 outlets across Malaysia.

“For the past two years, Focus Point outlets did face some issues as we carried international brands for the middle-to-high end category.

“Consumers try to bring down their spending in terms of eyewear and are looking to downgrade their choices.”

The average amount spent at Focus Point ranges around RM500 to RM600 while the figure is much lower for Whoosh at RM200.

The youth market, says Liaw, is generating a lot of buzz for the business as robust demand for contact lenses recorded more than a 10% growth annually for the company.

“We are getting younger customers for this segment, who use contact lenses not just for vision correction but also cosmetic purposes.

“Those who already own eyewear would opt to put on a pair of daily disposable contact lenses for special occasions,” he adds.

 

Eye checks at customers’ doorstep

With regards to e-commerce, Focus Point previously partnered with e-marketplaces such as Lazada Malaysia as its primary online store. This has since changed as the company has set up its own e-store.

“We are trying to develop products that are sold exclusively online. Also, we may be able to provide better discounts and lower price as we have a lower overhead for our e-store,” Liaw adds.

Buying a pair of sunglasses online is entirely different than purchasing a pair of prescription glasses. Liaw says Focus Point aims to introduce a door-to-door service that allows its optometrist to perform eye checks on customers at their doorstep.

This service, which is slated to be introduced early next year, will make use of the brand’s network of over 200 opticians and optometrist nationwide.

“With such service, customers can now purchase their desired glasses online with the prescription given by our optometrist who has performed an eye check at their convenience,” he explains.

Corporate customers is another market segment which Focus Point aims to invest heavily to generate more sales in the coming months.

Petaling Jaya City Council (MBPJ) and Selayang Municipal Council (MPS) are some of Focus Point’s corporate customers as the company has been appointed as their panel optician.

Though Focus Point has an existing corporate sales department, Liaw says it is more aggressive in recruiting corporate clients this year as optical allowance is fast becoming a common employee benefit these days.

Komugi looks to expand overseas

Focus Point Holdings Bhd’s bakery brand Komugi, which currently has 15 outlets in Malaysia, plans to expand its operations overseas.

Focus Point CEO Datuk Liaw Choon Liang says it will be opening a store in Melbourne, Australia and one in the UAE by year end. There are also seven Komugi outlets in the Philippines.

“The overseas expansion for our F&B business has a high potential, and the same goes for our Whoosh brand as they are our in house brands,” says Liaw.

Twelve of the Komugi outlets in Malaysia are directly owned by the company while three are owned by franchise partners.

The five-year-old home grown brand has had a difficult past 12 months. In October 2016, a rat was found in a baked goods tray at one of the Komugi outlets. The incident forced the bakery to shut down the outlet for cleaning purposes.

Komugi introduced its cheesecake in a cup concept Fuwari at the recent Malaysia International Retail and Franchise Fair in July. Liaw says it managed to sign a partner from Kuching to take up the brand.

The first Fuwari outlet is slated to open in Mid Valley Megamall in Kuala Lumpur in early 2018.



This article first appeared in Focus Malaysia Issue 250.