Indonesia’s oldest department store to open outlet in Mecca

JAKARTA –Indonesia’s oldest modern department store Sarinah is expanding into Saudi Arabia with an outlet in Mecca scheduled to open in late February, the company’s CEO Gusti Ngurah Putu Sugiarta Yasa told Salaam Gateway.

The state-owned company, known for its locally-sourced traditional handicrafts, textiles and home decorations, formed a joint venture with Saudi hotel operator Al Burhan Trading Ltd, which is providing support facilities and the store that is located 3 kilometres from Masjid al Haram.

“Sarinah previously established stores in New York and Singapore in the early 2000s but was forced to shut down due to financial constraints and lack of competitiveness. But we are now more confident because we are cooperating with a local partner that has considerable experience in the retail business,” said Yasa.

Sarinah expects to supply its new store in Mecca with around 90,000 units of products, which is roughly 10 percent of what it sold in Indonesia last year.

Established in 1962, Sarinah to date has maintained its focus on partnering with more than 500 small Indonesian businesses that are able to offer products to the store’s collection. It has in recent years ventured beyond small traditional manufacturers to also collaborate with young local artists and more urban start-ups to appeal to a broader consumer base in Indonesia.

“[W]e are very open to new opportunities to simultaneously broaden their consumer base and spur the development of brands with potential to represent Indonesia on the global stage,” Yasa said.

According to him, the company has allocated 126 billion Indonesian rupiah ($9.46 million) in capital expenditure for this year, which is double last year’s capex. He did not reveal the investment figure committed to Sarinah’s expansion into Saudi Arabia.

Sarinah aims to generate revenues of 500 billion rupiah this year, up 11 percent from last year’s 450 billion rupiah. 

($1 = 13,317 Indonesian rupiah)

(Reporting by Yosi Winosa; Editing by Emmy Abdul Alim [email protected])

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