Japanese retailer Aeon Stores says it will not open new shops in Hong Kong after its profit declined 41 per cent last year, reports South China Morning Post.

It says it will focus instead on honing the performance of recently opened stores in the market. It opened five stores last year, increasing its store count to 43.

The company blamed the profit slide on high costs as result of the expenses for the new stores and impairment losses.

“The economic condition in Hong Kong will inevitably be dragged down by the slow growth in the US economy,” said Aeon Stores MD Chan Pui-man.

Aeon Stores says it will turn its focus of expansion to the mainland China, where it has 25 stores. It will invest a capital expenditure of HK$276 million, of which HK$251 million will be used for expanding its network in the mainland.