However, Ramayana Lestari Sentosa - the operator of Ramayana, Robinson and Cahaya stores - denied that it closed the eight stores due to financial trouble. Instead, it emphasized these shutdowns were part of the company's transformation and its strategy to introduce a new concept: one-stop shopping where customers can get all they need in one shop (including cinema services by partnering with a cinema operator).

In fact, the company opened several stores ahead of the year-end in 2017 and therefore had a total of 116 stores per 1 January 2018. It plans to open three more stores - before the start of this year's Idul Fitri celebrations - in Bekasi, Cibubur and Jakarta. Setyadi Surya, Corporate Secretary at Ramayana Lestari Sentosa, said the company does not plan to shut down any stores in 2018. The company's main strategy for business expansion is the opening of new stores.

Among the three new stores, one will be a "Ramayana Prime" store, the new concept that was introduced by Ramayana Lestari Sentosa in late-2017. The first prime store was opened in City Plaza (East Jakarta). This type of store is the result of the company's quest for innovation and transformation. At these Ramayana Prime stores consumers can do all sorts of shopping (particularly fashion shopping), go to the cinema, and/or eat & drink in the food court.

Based on geography, Ramayana Lestari Sentosa divides its sales market in three regions: (1) the Greater Jakarta Region (which is Jakarta, Bogor, Depok, Tangerang, and Bekasi), (2) Java island (excluding the Greater Jakarta Region), and (3) the rest of Indonesia. The company's sales are greatest in the Greater Jakarta Region and therefore it is focused on opening new stores in this region.

Projection Future Corporate Earnings Ramayana Lestari Sentosa:

   2016 2017F 2018F 2019F
Gross Profit 2,202 2,288 2,513 2,716
Net Income  408  415  515  580
Net Margin   5.0   4.9   5.8   6.0
Return on Equity (%)
  8.7   8.6  10.0  10.5
Return on Asset (%)
  8.7   8.8  10.5  11.1

in billion IDR rupiah unless otherwise stated
Source: Sinarmas Sekuritas (25/01/2018)

In full-year 2018 Ramayana Lestari Sentosa targets to see a 5 percent year-on-year (y/y) growth in sales as well as same store sales. Mirae Asset Sekuritas Indonesia expects to see a 6.1 percent (y/y) growth in the company's sales this year, supported by the opening of new stores.

Currently, Ramayana Lestari Sentosa's market capitalization reached IDR 8.48 trillion (approx. USD $638 million) with a price-to-earnings ratio (PER) of 17.32 times. On Friday (26/01), the company's shares, listed on the Indonesia Stock Exchange, fell 0.42 percent to IDR 1,185 a piece. So far this year its shares have fallen 1.25 percent.

Stock Quote Ramayana Lestari Sentosa - RALS:

However, Mirae Asset Sekuritas Indonesia sees room for growth as it put its 12-month projection for Ramayana Lestari Sentosa's shares at IDR 1,415 a piece.

Indonesia's conventional department store industry is actually facing big challenges and needs to come up with a new strategy or shopping concept to survive amid increasingly fierce competition from domestic and global e-commerce platforms.

Read also: Battle of the Retailers: Department Stores vs E-Commerce Platforms