The Sunday Leader

Redundancies hits sales

The economic downturn, made worse by company closures that has resulted in job losses, has hit the local umbrella market, an entrepreneur involved in this sector seemed to think.
Fazal M. Fausz (32), Managing Director Rainco (Pvt.) Ltd., told reporters, with inflation under control compared to what it was last year, this then appeared to be the reason for the sales contraction in this sector.
Fausz who claimed that his company controlled 55% of the local umbrella market, said that in the last four months sales were down 10% year on year (y.o.y.).
Retailers in the Galle-Matara chain say that umbrellas are not moving, he said.
Fausz added that in the first nine months of the year, turnover was down 10% y.o.y. to Rs. 250 million.
He said that 60-70% of the company’s turnover was derived from the sale of umbrellas, while the sale of other items such as mosquito nets contributed the remainder.
Fausz also said that the seeming failure of this year’s Maha rains was also expected to affect their sales badly. This means the growth in inventories, he said.
Fausz however said that by transforming the umbrella as a piece of fashion, especially women and tapping the almost virginal hotel umbrella market, proved that there was scope for this sector to grow.
He said that it was a common site to find outdoor umbrellas in hotels in Europe, though it’s an uncommon sight, especially in the resort hotels down south here.
The company also exports its umbrellas to the Indian market, where there is a 5% duty concession under the Indo-Lanka Free Trade Agreement.
Rainco which has four umbrella factories in Kandy providing employment to 600 also manufactures teak and mahogany based furniture for both the local and export markets, though its turnover to group turnover was infinitesimal, said Fausz.

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