Jakarta – The Indonesian Retailers Association, or Aprindo, says the closure of 7-Eleven outlets on June 30 may lead to a layoff of more than 1,000 employees at Modern International, the master franchisor of the stores in Indonesia.

According to Modern International's 2016 audited financial report, the company employed 1,605 people, of whom 86 percent were high school graduates. About 74 percent were contract-based employees and only slightly more than 400 were employed full-time.

"Aprindo requests the government's cooperation in developing the industry. No more Sevel [7-Eleven] cases please," Aprindo chairman Roy Mandey said on Friday (07/07), adding 7-Eleven's case is an example of how policies can hurt retail businesses.

A government regulation issued in 2015, banning the sale of beer and beverages containing less than 5 percent alcohol, contributed to the company's decision to close its stores.

According to Roy, 7-Eleven's case was internally due to cashflow problems and a shortage of skilled workers, while externally the retail industry generally suffers from the slowing economy and weaker consumer demand, with people trying to limit their spending.

Modern International obtains its revenue from three core businesses. In addition to being a convenience store operator, the company also provides IT-based document management, and is involved in the distribution of health equipment.

The 7-Eleven business contributed about three quarters of the company's revenue. Modern International said it may focus on developing its other businesses after closing the remaining 7-Eleven convenience stores late last month.

Source: http://jakartaglobe.id/business/1000-facing-layoff-7-eleven/