Lifestyle International Holdings, the operator of Sogo department stores, plans to buy a controlling stake in an unprofitable shopping centre in Hebei province for 540 million yuan as it seeks to penetrate into second-tier mainland cities.
The mall marks the seventh mainland retail project the company has undertaken since the end of last year as part of its efforts to spread the Jiuguang brand across the country.
Lifestyle, controlled by Thomas Lau Luen-hung, is buying 60 per cent of Kaiyuan Square in Shijiazhuang Beiguo Commercial City, according to a company statement to the Hong Kong stock exchange.
Kaiyuan Square has a gross floor area of 162,151 square metres. It made a loss of 1.68 million yuan for the first eight months of this year.
Lifestyle, which operates Sogo stores at Causeway Bay and Tsim Sha Tsui and a Jiuguang store in Shanghai, has bought three stores and three sites on the mainland since November last year.
The company paid 750 million yuan for the three loss-making stores, in Dalian, Tianjin and Qingdao, and a site in Harbin from Japanese retailer Itokin. Lifestyle also bought a site in Shenyang's Shenhe district for 1.02 billion yuan in December last year. The gross floor area of the planned store, due to open in 2009, will be about 310,000 square metres.
