Vietnam’s top mobile retailer Mobile World Investment Corporation (MWG) is planning to streamline its operations and close nearly 200 unprofitable stores by year-end, citing a significant revenue drop in January-October.

The electronics giant, comprising the mobile phone retailer The Gioi Di Dong, electronics store Dien May Xanh, and grocery chain Bach Hoa Xanh, reported a total revenue of approximately VND11.2 trillion (US$461.3 million) last month, according to the January-October business results recently published on its official website.

This marks the first positive growth this year compared to the same period in 2022. 

The The Gioi Di Dong and Dien May Xanh chains contributed over VND7.8 trillion ($321.3 million), down five percent from last year but up about eight percent from the previous month, driven by the new iPhone 15 launch.

The Bach Hoa Xanh chain contributed VND3 trillion ($123.6 million), a 29-percent increase from the same period last year, with an average revenue exceeding VND1.7 billion ($70,000) per store.

In the first 10 months of 2023, the combined revenue of the The Gioi Di Dong and Dien May Xanh chains reached VND70.2 trillion ($2.9 billion), a 21-percent decrease from the same period last year. 

Meanwhile, Bach Hoa Xanh stores generated VND25.3 trillion ($1 billion), up 13 percent year on year. 

Revenue from online channels alone approximated VND13.3 trillion ($548 million), representing a 13-percent decrease from the same period last year.

Founded in 2004, MWG began as a small company with three mobile phone and electronics stores. 

Today, it boasts a network of six chains with over 5,500 outlets and employs more than 70,000 workers across Vietnam, as stated on the company’s website.

The firm said in the January-October business report that in response to evolving market conditions, it actively undertakes restructuring in the fourth quarter, aiming to optimize costs, enhance operational efficiency, and adapt proactively to the new business landscape marked by numerous challenges and changes.

As part of this initiative, the business is contemplating the closure of approximately 200 stores that exhibit inefficiency in terms of revenue and profit within this quarter.

The exact distribution among each chain is not specified.

“We will closely monitor the results and make appropriate adjustments as needed,” MWG assured shareholders in its updates.

Simultaneously, the company is conducting a comprehensive review of all functional departments to streamline operations, focusing on core aspects for practical efficiency. 

The goal is to achieve lean operations, ensuring financial health and preparedness to capitalize on opportunities in the presence of positive signs.

Q4 outlook

In a recent meeting, MWG’s chairman Nguyen Duc Tai anticipated a slight improvement in this fourth quarter compared to the previous quarter. 

However, he expressed caution, noting the difficulty in expecting robust growth during major holidays such as Christmas and Lunar New Year, unlike in previous years.

As per the financial report for the first three quarters of 2023, the enterprise achieved nearly VND86.8 trillion ($3.8 billion) in net revenue and about VND77.4 billion ($3.2 billion) in profit after tax, reflecting a decrease of nearly 16 percent and almost 98 percent compared to the same period last year, respectively.

By the end of the third quarter, the company held total assets exceeding VND58.6 trillion ($2.4 billion), showing an increase from the beginning of the year, with cash and cash equivalents constituting approximately 40 percent.

The enterprise carries a financial debt of more than VND22.9 trillion ($943.3 million), a sharp increase compared to the beginning of the year, while equity reached more than VND23.2 trillion ($955.7 million).

On the stock market, MWG’s stock price (HOSE: MWG) closed Friday’s trading session in the green, temporarily anchored at VND38,550 ($1.59) per share. 

Over the past quarter, the stock price has undergone fluctuations, witnessing a decrease of about 20 percent.

“Those with confidence will remain calm, believe in the company’s restructuring activities, and view this as an opportunity to buy,” chairman Tai said, regarding stock trading issues at the investor meeting earlier this month. 

“Those lacking confidence in the business may choose to sell.”

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