CEO Morning Brief

Home Shopping Astro Go Shop to Cease Operations After Eight Years

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Publish date: Tue, 03 Oct 2023, 08:45 AM
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TheEdge CEO Morning Brief

KUALA LUMPUR (Oct 2): Pay-TV provider Astro Malaysia Holdings Bhd announced that it will close down its home shopping business under “Go Shop” from Oct 11, citing “challenging overall economic landscape and the changes in consumer shopping behaviour”.

"There has been a significant downturn in this mode of shopping since the Covid-19 pandemic and closure will ensure that Astro Malaysia’s resources are focused on business lines that contribute the biggest difference to the overall operations,” Astro Malaysia said in a statement on Monday.

The group and its Korean joint venture partner GS Retail Co Ltd (GSR) have decided that Astro GS Shop Sdn Bhd (AGSS), which operates the home shopping business under the brand name “Go Shop”, will cease operations beginning Oct 11. AGSS is a 60:40 joint venture between Astro Malaysia’s wholly-owned subsidiary of Astro Retail Ventures Sdn Bhd (ARV) and GSR.

“As part of the ongoing strategic realignment underway within Astro Malaysia, including the execution of significant cost-saving measures, both parties have taken the decision to exit the business," said Astro Malaysia.

It noted that Go Shop is not considered a material subsidiary of the group and is not expected to have a material effect on the group’s consolidated earnings per share and net assets per share or gearing for the financial year ending Jan 31, 2024 (FY2024).

Go Shop started in 2015 as Astro Malaysia’s first foray into the e-commerce domain, enabling Malaysians to shop anytime and anywhere 24/7. The home shopping platform was also present in Singapore and Brunei.

According to Astro Malaysia’s 2023 annual report, the group had fully impaired its cost of investment in Go Shop, which is held by ARV, amounting to RM48.1 million, following the subdued consumer sentiment, changes in consumer behaviour as customers return to physical stores, and continuing losses during FY2023.

Astro Malaysia’s net profit declined 75.98% in the second quarter ended July 31, 2023 (2QFY2024) to RM23.65 million, from RM98.47 million a year earlier, dragged by higher operating costs and unfavourable foreign exchange loss.

Shares in Astro Malaysia, which have fallen 30.77% year-to-date, settled down one sen or 2.17% at 45 sen on Monday, giving the group a market capitalisation of RM2.35 billion.

Source: TheEdge - 3 Oct 2023

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