AEON Big Subang to operate as usual despite court hearing

by PRIYA VASU/ pic credit: aeonbig.com.my

JAPANESE retailer AEON Big’s store in Subang Jaya, Selangor, will continue operating as usual after it was temporarily sealed on Tuesday for failing to settle a judgement sum of RM142 million.

The Alor Setar High Court has stated the execution of the judgement in default dated June 9, 2020, said AEON Big (M) Sdn Bhd in a statement.

The hearing to set aside the judgement in default for the sum of RM142 million made against the company has been fixed on Aug 6, 2020.

AEON Big had obtained the High Court Declaration from the Penang High Court in November last year to declare the agreement signed between AEON Big and Mega Continental Sdn Bhd.

Mega Continental prompted the suit against AEON Big after the retailer vacated the store in Alor Setar, Kedah, ahead of its lease expiration day.

Details on the dispute between these two companies are unclear. An attempt by The Malaysian Reserve to get clarification on the matter was not responded to.

On Tuesday, The Edge Markets reported the store’s last day of operation was on June 10. The publication also wrote the management of AEON Co Ltd’s retail units — AEON Co (M) Bhd and AEON Big — were being restructured and consolidated into a single organisation as part of a 10-year strategy to create an agile, resilient and intrapreneurial retail organisation.

This management reorganisation would involve the loss-making AEON Big relocating its offices from Subang Jaya to AEON Co’s headquarters at Taman Maluri, Kuala Lumpur.

In the statement yesterday, the retailer further said: “There are many important issues the company should be looking at, such as preserving economic sustainability, protecting public health and providing continuous employment to the people. AEON Big is committed to continue to move forward with great confidence.”

The company is scheduled to open its 22nd store in Malaysia at Jaya One in Petaling Jaya, Selangor, on July 23 with a net lettable area of 41,527 sq ft store, which targets to provide about 150 employments.

The company further stated that the country is facing an unprecedented global health pandemic and domestic economic crisis. “It is important to focus on building the businesses and help revive the economy despite experiencing a very challenging year due to Covid-19.

The management has turned the company to become profitable for the first half of 2020, compared to previous years since taking over the stores from Carrefour in 2012. With continuous support from our staff, vendors and suppliers, AEON Big believes that this strong performance will continue throughout 2020,” it added.

AEON posted RM1.02 billion for its retail business segment for the quarter ended March 31, 2020, lower by 0.9% compared to RM1.03 billion recorded in the previous year’s corresponding quarter, mainly due to lower general merchandise sales (GMS) recorded especially during the Movement Control Order (MCO) period, whereby GMS were not allowed to operate.

Revenue from its property management services segment for the quarter at RM169 million was lower by 3.6%, over the previous year’s corresponding quarter of RM175.2 million.

The shortfall in revenue was mainly due to lower sales commission receivable from tenants, especially during the MCO period where non-essential services tenants were not allowed to operate.

The segmental profit of RM55.7 million was lower compared to RM66.9 million recorded in the previous year mainly due to the same reasons. Its share price closed at 97 sen yesterday, giving it a market capitalisation of US$1.3 billion (RM5.59 billion).