Three months after Super Typhoon Haiyan struck the easternmost provinces of the Philippines, killing more than 6,000 people and displacing thousands more, the country’s retail industry is starting to recover.
Despite the scale of destruction, estimated at $14 billion, the Philippines, according to analysts, is still on track to post economic growth rates within the target range of 6 to 7 percent for 2013, as forecasted. Still, Haiyan ushered in a definite slowdown in the fourth quarter. Retail appears to be slowly bouncing back so far this year.
“There’s no doubt about it, this is the storm that stole Christmas,” said Manila-based banker Simon Paterno.
Patrick Garcia, a financial analyst with Value Quest Securities, concurred. “The effects have been felt most acutely in the retail sector, and in the capital region that includes Manila and its environs, because consumers were prioritizing relief efforts over personal shopping. It was an austere Christmas as people chose to spend money on multiple donations.”
Mark Gonzalez, the entrepreneur behind Homme & Femme, the company that introduced Filipinos to such labels as Comme des Garçons, Balenciaga, Dries Van Noten and Pierre Hardy, said his company “saw a steep decline in sales — as much as 30 percent — until the end of the November,” but sales rebounded over the holidays with big-ticket gift items doing particularly well.
“Sales did rally in the last month [of 2013], and we are pleased that we ended the year within reasonable outcomes,” Gonzalez said. He added that “January is a bit soft, but it should pick up. This is the normal trend. We remain on track for our new store openings in the first quarter of this year, most notably Carven.”
According to Rowena Tomeldan, vice president and head of operations and support services of the commercial business group of Ayala Land, one of the country’s most prominent mall developers and operators, “Sales during the first half of 2013 were very strong, given very good economic conditions in the country. However, the natural calamities in the last quarter of the year delayed Christmas shopping as Filipinos focused on helping the victims of the earthquake in October and the super typhoon in November.
Marked improvement in sales was only felt in the supermarket category as relief goods were bought from the supermarkets.”
Ben Chan, chief executive officer of Suyen Corp. — which owns and operates such local clothing chains as Bench and Kashieca, in addition to representing and distributing international brands like American Eagle Outfitters, Aldo and Repetto — said his company’s retail business achieved double-digit sales growth in December, thanks in part to a strategy to push prepacked gift sets of T-shirts, fragrances and other items.
Overall, observers remain upbeat about the Philippines’ longer-term outlook. Paterno noted that the two provinces most affected by Haiyan contribute just 2 percent to the country’s gross domestic product. “Ironically, we might even see a blip in those figures from rebuilding efforts, what with the massive inflow of aid coming into that region,” Paterno said.
Garcia echoed the same sentiment. “The business climate remains positive. In fact, it may improve, and this can be attributed to rehabilitation-connected activities. There will be some slowdown in 2014, with growth forecasted at 6 to 7 percent. The Philippines remains one of the fastest-growing economies in the world, with its stock market being the best-performing stock market in the region. The fundamentals are all good.”
Like consumers, retailers and brands have been putting a heavy emphasis on fund-raising for relief efforts. Louis Vuitton was one of the more high-profile brands that made a point to raise money for typhoon victims. The French house celebrated its 20th anniversary of doing business in the Philippines with a special art exhibition entitled “A Tribute to Heroines.” The one-week exhibition, which ran from Dec. 9 to 16 at the brand’s flagship in the upscale Greenbelt 4 mall, featured the work of five contemporary Philippine artists: Popo San Pascual, Olivia d’Aboville, Ramon Orlina, Fernand Cacnio and Chati Coronel.
The art on display was not just for show. It was part of a fund-raising initiative on the part of the brand to benefit the SOS Children’s Village in Tacloban, one of the cities flattened by Haiyan. The funds will go toward rebuilding damaged homes in the village.
Rhea De Vera-Aguirre, country manager for Louis Vuitton in the Philippines, would not disclose the actual amount raised, but said that it was “a considerable amount in a week,” with the proceeds used to provide immediate support for the displaced children and SOS mothers in Tacloban.
In addition, Louis Vuitton Philippines responded immediately to the Philippine Red Cross’ call for private-sector support when Haiyan struck, donating a lump sum to the charity within days after the calamity, De Vera-Aguirre disclosed.