Ashford W. Meikle, Business Reporter

The Courts furniture store at Liguanea, St. Andrew, is an indication of how the new Montego Bay store will look. - Andrew Smith/Photography Editor

Furniture and appliance retailer, Courts Jamaica Limited, is banking on the opening of its 28th store in Bogue, Montego Bay, St James to refuel the company's static financial performance and improve shareholder value.

The company has spent about $20 million outfitting the location, financed from the company's cash reserves - amounting to more than $400 million in cash and investments - and is virtually debt free.

The premises will be leased, said Courts managing director Hayden Singh.

He pointed to the cement crisis, violence and the recent World Cup Football competition as factors behind the company's lacklustre performance.

The company's interim results to October 1, 2006 point to a two per cent increase in turnover to $2.9 billion, compared to the $2.8 billion second quarter results in 2005. Net profits amounted to $384 million, compared to $383 million the year prior.

"We are hoping that Christmas will be a reasonably good period," said Singh, whose company is on the verge of being sold to pay down the liabilities of its parent Courts Plc (in administration).

Notwithstanding the legal uncertainty surrounding its parent company, which was placed in receivership some two years ago, Singh said it was business as usual for the Jamaican operation.

"The administration has not really affected us: we are self-supporting; we have money in the bank," he said. "We are debt free so we need to invest for returns to our shareholders."

The second store in Montego Bay - the first is on Barnett Street, in the city's centre - is located in a zone of the St James capital that is rapidly expanding commercially, its land use having been converted from cane.

Courts joins companies like Super Plus, Palace MultiPlex, Fontana Pharmacy and KFC, which established operations at the Fairview Complex at Bogue when it seemed almost obvious that any expansion of the resort city would have to be along the western corridor to Reading.

"The store should be opening around November 20. We thought we would open it next year but we managed to move things a bit forward," said Singh.

The Courts outlet will cover some 10,000 square feet.

Good location

"It's a good location," said Singh, explaining that the congestion in Montego Bay had necessitated Courts searching for additional space with adequate parking to accommodate footfall, which is important to store sales.

"I think it will do very well; we have done a capital projection on it over a period of five years and the likely return and we are satisfied [it's a good] investment," noted Singh, who pointed out that the plans had been in the works for the past two years.

In that sense, he expects the new addition to the network to mimic other stores, saying all 27 were making money.

"They are all profitable," he said.

- ashford.meikle@gleanerjm.com