Restructuring helps Laksala grow - Chairman
Laksala continues to remain the leading gift and souvenir boutique
chain in Sri Lanka. It has a supply base of 8,000 craft entrepreneurs
and 13 well-designed showrooms of international level.
"Our growth rate is 67 percent at present. Laksala recorded a revenue
of Rs 246.7 million in 1Q, 2014, compared to Rs. 147.8 million in 1Q,
2013," Laksala Chairman and CEO Anil Koswatte said.
He said that timely initiatives to expand the local and foreign
customer base, introducing new and value added products and cost saving
projects paved the way for Laksala to report growth.
"The revenue target for 2014 is Rs 1 billion, which we are confident
we can achieve parallel to the growth of the tourism industry which has
a target over 1.5 million tourist arrivals this year. We aim at
attracting at least 65 percent of the tourists to Laksala showrooms," he
With the major portion of the sales revenue coming from sales to
tourists, Laksala is an indirect exporter contributing towards the
export revenue of the economy. Laksala acts as an export trading company
to a large number of small and medium-scale craft entrepreneurs.
It hopes to purchase products worth Rs 600 million from local
industrialists. With plans to open seven more stores in the near future,
Laksala will have 23 outlets by 2020.
The landmark Laksala Museum Gallery Café, which was opened recently
attracts many tourists and high-end local clients.
"The idea originated from Economic Development Minister Basil
Rajapaksa as part of his efforts to boost the tourism industry. We
continue to look at a brighter future under the Ministry's Divi Neguma
national program as well," said Koswatte.
The quality of the products have been upgraded and greater attention
is paid to quality. The product portfolio has reached more than 30,000
and customers now have a better choice.
Laksala has repositioned the business to attract the attention and
goodwill of local and foreign customers. The vision of Laksala is to
become the leader in the gift and souvenir category in Sri Lanka.
Being the biggest and the oldest business chain in this sector has
several competitive advantages.
It is widely recognised as a trusted retailer supported by the
strength of being a state institution. Its products are recognised as
genuine and of high quality. Laksala is committed to protect and
preserve the traditional craftsmanship of the rural community an
integral part of our heritage.
The management of Laksala embarked on a comprehensive modernisation
program in 2011 to restructure the institution and make it profitable,
sustainable and more relevant to the demands of customers.
A three-pronged strategy was adopted. The strategies were re-defining
the category to expand the product range, repositioning the institution
through branding and marketing and improving the level of service of
employees by fostering positive attitudes among staff for better
The management of Laksala correctly identified that the institute
would be more competitive if it was seen as more than simply a marketeer
of handicrafts and instead operated within the gift and souvenir
category. This is a sector that has great potential and demand
especially among tourists.
In line with this approach, Laksala expanded its product category to
include souvenirs such as masks, gems and jewellery, Ceylon tea and
spices, handloom and batik items, leather products and ceramics.
An intensive branding exercise was carried out and several main
outlets were extensively refurbished and turned into modern, attractive
showrooms. These boutiques more effectively showcase the wide range of
products that Laksala has to offer and the beauty of Sri Lanka's
traditional gift and souvenir products.
To improve the level of service of employees, we needed people who
were in tune with modern marketing methods that the organisation was
adopting. To introducing new skills and fresh thinking, a voluntary
retirement scheme was offered for those who opted to leave and several
younger people were hired.
With these changes, Laksala has become a modern, customer-friendly
and financially sustainable institution. Laksala has been working with
the Sri Lanka Development Authority, National Crafts Council, the Design
Centre, Faculty of Design of the Moratuwa University and the Academy of
Design to improve design while maintaining the authenticity of
traditional gift items.
It has also entered into an agreement with the Bank of Ceylon to
provide craftsmen with financial assistance to expand production
Laksala obtained the services of the National Gem and Jewellery
Authority to certify the authenticity of gems and the standard of metals
used in jewellery offered for sale in Laksala outlets.
Laksala is aligned with government programs such as Divi Neguma
envisioned in the Mahinda Chintana policy document and introduced by the
Ministry of Economic Development to help the rural sector by improving
local products. It ensures that rural entrepreneurship is enhanced and
there is a positive impact on rural poverty reduction.
Laksala is poised for future growth, supported by the commendable
performance of Sri Lanka's economy, flourishing tourism sector and
increased efforts by the government to develop the local gift and
The economy has been growing at a rate of over six percent for the
past three years as peace and political stability began to pay
This growth was mainly led by the agriculture and service sectors,
though there was growth across other areas. The tourism industry is
flourishing with arrivals increasing annually. As tourism is the main
driver for gift, souvenir and traditional Sri Lankan handicrafts, the
increase in arrivals indicates the immense potential of this industry.
Laksala, one of the most renowned shopping destinations in the
country, was awarded the Certificate of Excellence 2014, based on
customer reviews and ratings of shopping malls across the globe by
Tripadvisor, which is acclaimed as the world's largest travel site
enabling travellers to plan and have the perfect trip including
Tripadvisor branded sites make up the largest travel community in the
world, reaching nearly 260 million monthly visitors and more than 150
million reviews and opinions covering more than four million
accommodations, restaurants and shopping destinations.
The Certificate of Excellence 2014 was awarded based on Laksala's
excellent customer service, level of fulfilling their needs and the
degree of satisfaction by customers who visited Laksala.
"This was a remarkable achievement following the restructuring of the
institution after being identified as an under-performing entity and
turning it around to a profit making, world class international shopping
destination within three years," Koswatte said.
This is the first time this award was won by Sri Lanka and Laksala
was the only government institution selected for this prestigious award
among 22 leading shopping destinations in Sri Lanka.
This is ample testimony of our commitment to customer satisfaction
and service excellence.
Laksala was set up in November 1964 under the Department of Marketing
and Export Promotion of Handicrafts. In 2009, on a directive of
President Mahinda Rajapaksa, Laksala was bought under the supervision of
Strategic Enterprise Management Agency (SEMA) to be managed as an
independent commercial enterprise.
Since then, Laksala has witnessed numerous changes with an ever
growing list of products on offer. It enables the supply chain to be
profitable and viable by having a safety net on product pricing.