New | Parkson Retail Group says full year profit falls 33.5 per cent

Mainland department store operator Parkson Retail Group said full year profit dropped 33.5 per cent, dragged down by the costs of disposing old underperforming stores as it attempts to transform itself into a mall-like lifestyle experience.

“You can sense that the challenges that we face are unprecedented,” chief executive Shaun Chong Sui Hiong said.

As a sector, department stores are being threatened by both e-commerce players which are less capital intensive and can pass savings onto consumers and malls which offer newer and more modern entertainment and lifestyle facilities.

Profit for the year ended December was 235 million yuan while total gross sales declined by 4.2 per cent to 19,499.4 million yuan.

The group closed four underperforming stores incurring one-off provisions of 105.1 million yuan. Excluding this, profit declined 3.8 per cent compared to last year. Same stores sales growth for the year declined 7.1 per cent year on year.

In the same period, it opened five new stores in second tier cities and made its first shopping mall acquisition in Qingdao, expected to be launched in the fourth quarter of 2015.

It expects to spend 300 to 400 million yuan refurbishing old stores and opening new ones.