Jakarta. Modern Sevel Indonesia, a retailer unit of Modern Internasional, a listed company controlled by the Honoris family, has announced it will close all of its remaining 120 7-Eleven outlets across the country.
The decision marked a tragic end for the once popular chain that just seven years ago set a new benchmark for the country's convenience stores, thanks to its introduction of an eat-in-store concept.
"With this letter, we intend to inform that as of June 30, 2017, all 7-Eleven outlets under Modern Sevel Indonesia will suspend operations," Chandra Wijaya, director of Modern Internasional, said in a statement to the Indonesia Stock Exchange on Thursday (22/06).
Chandra said the decision was made due to the company's limited ability to support operational activities of the 7-Eleven outlets.
Since the end of last year, Modern Sevel has closed 46 7-Eleven stores, citing continuing losses the stores made, leaving only 120 stores in operation.
The stores' sales dropped to Rp 891 billion ($67 million) last year from Rp 1.2 trillion in 2015. Modern Internasional's loss widened by more than times to Rp 636 billion over the period.
Modern Sevel accounted for around three quarters of the revenue of the parent company that also sells medical equipment and Ricoh photocopy machines.
Modern Sevel was particularly hit hard by the government's decision to ban sale of alcoholic beverages in convenience stores, which undermines the chain's appeal as a hangout place for young people.
At its peak, beer sales alone contributed between 8 percent to 12 percent of the company's sales and boosted sales of snacks and other food items.
A last-ditch attempt to sell the ailing business to Charoen Pokphand Restu Indonesia, a local unit of Thai's conglomerates Charoen Pokphand, for Rp 1 trillion fell through last month.
"Matters related to and arising from the 7-Eleven operational shutdown will be followed up in accordance with applicable laws and regulations, and be resolved immediately," Chandra added.
Modern Internasional was founded by Otje Honoris, whose love of photography inspired him to establish a photography equipment distribution for Japan's Fuji Photo Film in Jakarta in 1971.
Facing an onslaught from digital photography, Henri Honoris, Otje's grandson, led the company to transform its widespread Fuji photo processing stores into 7-Eleven stores back in 2009.