Shenzhen-headquartered Rainbow Department Stores is continuing to expand despite falling profit in 2014.

According to stock exchange filings, Rainbow increased sales last year by 6.02 per cent to RMB 16.998 billion (US$2.7 billion). But its profit fell 11.84 per cent year-on-year to RMB 773 million ($124.5 million).

Rainbow stores opened 12 new shops under its own brand and one new Dreams-on store, added five new Weiwo convenience stores and acquired a chain of 153 Q-mart c-stores.

The company now has 62 Rainbow-branded stores and one franchised store with a combined trading area of more than 1.8 million sqm. Its Dreams-on owned chain now stands at four.

At year end, Rainbow had expanded into Guangdong, Jiangxi, Hunan, Fujian, Jiangsu, Zhejiang, Beijing, and Sichuan.

The company says in 2015 it will transform and restructure its internal business model to boost profitability.

The company will focus on developing a mobile eCommerce channel and improve its supply chain capacity.