Netopia chain to close shops on weakening patronage
Manila Times
THE operator of the Netopia chain of Internet cafes will close more branches in the second half of this year on weak consumer spending due to soaring inflation.
"We will close three more branches in Bicol in the remaining part of this year," George Tan, Digital Paradise Inc. (CDPI) president told The Manila Times on the sidelines of the Entrepreneur Franchisee Award Tuesday evening.
Since last year, the company shut down 12 shops, including four stores in Thailand, the executive said. The Internet café chain entered the Thai market four years ago with four branches as a "pilot project" for its planned overseas expansion.
DPI is 75-percent owned by ePLDT, the information communication and technology arm of Philippine Long Distance Telephone Co.
At present, Netopia has 161 branches nationwide, of which 81 stores are company owned and the remaining operated by franchisees.
"With the price of oil, everybody is not spending," Tan said, adding customers, most of whom are students and relatives of overseas Filipino workers, dropped by 5 percent.
In the first six months this year, the company incurred a lower net loss of between P7 million and P9 million compared with P15 million in the same period last year, he said.
Tan said the company's first half revenues reached more than P300 million from last year's P150 million. "Our losses [have] gone down. We expect to post profit by next year," he said.
The bulk of the company's revenues comes from Internet surfing, communications, training and educational research at 55 percent. This is followed by value-added services such as desktop publishing, photo printing and retail sales of prepaid cards, game cards and storage media at 30 percent, and on-line and LAN games at 15 percent.
Last year, the company incurred a net loss of P29 million from P114 million in 2006.
–Darwin G. Amojelar
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