Parkson China closing stores as sales slump
Parkson China’s first department store, which opened on Beijing’s Fuxingmen Rd in 1994, is the brand’s last remaining outlet in the capital as slumping sales force it to close outlets across the country.
Parkson closed its Longhu Beijing Changying Street department store and similar outlets in the cities of Hefei and Zhengzhou at the end of May, according to a Chinese news agency.
A pioneer foreign investor in China’s retail scene, Malaysia-based Parkson now has 46 department stores across China, down from 60 in 2015.
Its total sales in China have dropped 8.3 per cent year-on-year from 2013 to last year to RMB14.3 billion (US$2.1 billion), according to the latest annual report of the brand’s Hong Kong-listed business. This reflects an industry-wide trend – a survey of 85 department stores found that 55.3 per cent had lower sales last year, with 15 companies experiencing a drop of more than 10 per cent.
Parkson joins such domestic chains as Hualian Department Store and Jiuguang Department Store in shuttering stores. Last year alone, Parkson terminated five mainland department stores, including Beijing’s Sun Palace Parkson, which it sold for RMB2.3 billion.
Shanghai officials last month closed the iconic No. 1 Department Store and Orient Shopping Center for a major renovation. Parkson is also branching out into more modern retail formats with its parent company, Lion Group, opening its first full-fledged shopping centre in China last year. The 230,000 sqm Qingdao Lion Mall offers F&B, entertainment and grocery shopping along with traditional retail fare.
Parkson also launched a standalone gourmet grocery store, Parkson Supermarket, and a flagship bakery store, Hogan Bakery, in Shanghai last year. The company has even made a belated foray into the mobile e-commerce world by rolling out a shopping app.
These moves helped the company’s sales pick up by 1.4 per cent in the fourth quarter of last year, bucking a downward trend.
Meanwhile, Britain’s Marks & Spencer has already closed down all 10 of its Mainland China stores in the face of continuing losses, which the company attributed to low brand awareness and a struggle to grow market share.