Laksala to diversify after turning around a loss-making entity
The Laksala handicraft boutique chain owned by the Sri Lanka Handicrafts Board is to diversify its functions with the aim of popularising and promoting local handicrafts industry both locally and globally following the turnaround of the once, loss-making entity to a profit- making venture, a top official of Laksala said.
According to the latest business plan, Laksala will form several subsidiaries creating opportunities for rural handicraft products to enter mega-markets, thereby enhancing the growth potential of the gift and souvenir category and adding value to the tourism sector.
The indigenous handicraft industrialists in rural areas will be provided financial and advisory facilities through these subsidiaries while vigorously marketing their products with value addition both here and overseas, Chairman of Laksala Anil Koswatte revealed.
In an interview with the Business Times, Mr. Koswatte noted that Laksala Import and Export Services will be established to import raw materials to produce gift and souvenir items including handlooms and batiks.
It will export gifts and souvenirs or any other value added products including furniture, he disclosed.
A micro financing agency will be launched to assist village craftsmen and rural suppliers. Hotel and Property Management Services will be formed as another subsidiary to operate and manage boutique type hotels with gift and souvenir shops.
Laksala Lifestyle Decor and Engineering Management Solutions will use local raw materials for interior decorations and provide necessary construction facilities as well, he added.
After restructuring the Laksala operations including the offering of volunteer retirement benefits for 70 employees, the company made a profit of Rs. 73 million last year.
The state entity plans to end this calendar year with an earning of Rs. 700 million and a profit of Rs 93 million, he disclosed.
Amidst all these accomplishments, the newest showroom that is being constructed at a cost of Rs. 185 million in the Colombo museum premises under the Divi Neguma social development scheme will be opened by the end of this month or early next month, he said.
All suppliers and service providers for the building project have been awarded contracts through transparent bidding process and all these contractors are registered with Laksala engineering division, he said.
For the first time in 20 years, in the report of the Auditor General, it was stated that the financial activities and cash flow for the year ended on 31st December 2011 and the financial situation of the Sri Lanka Handicrafts Board represented by the financial statements as at 31st December 2011 demonstrate a true and fair situation as per Sri Lanka Accounting Standards he emphasized.
The Laksala showrooms that operated with the basic and minimum facilities have been upgraded and refined to suit the needs of the modern day discerning customers.
The loss-making showrooms were closed down while the employees of these units were compensated under a voluntary retirement scheme which was drawn under a win-win system.
In addition many employee motivational programmes were conducted to upgrade and improve the customer service and professional standards of the existing employees of Laksala, he added.
Under the restructuring process certain outlets such as the Galle and Katubedda showrooms that were in a dilapidated condition were revamped and refurbished to look like sophisticated and modern gift boutiques.
In addition, establishing showrooms down both ways of the Southern Highway, extending the floor area at the Bandaranaike International airport from 80sqft to 960 sqft, opening new showrooms in Pinnawala, Ja-ela K-Zone and at the Racecourse were also part and parcel of the restructuring exercise.
Laksala’s flagship showroom in Thummulla has been upgraded to the level of a state-of-the gift boutique by extending its floor area and introducing new facilities and amenities sought after by the modern customers.
Now as a result of the restructuring process, the number of artisans, craftsmen and suppliers registered with Laksala has increased to 6000 from 800 a few years ago and the target is to further increase this number to 15,000, he disclosed.
The number of showrooms will also be increased to 15 from 7 and the product category range will be expanded to 50,000 from 20,000, he added.
The Laksala management has already commenced refurbishing their showroom in Fort, which is nearly 50 years old.
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