Fung Group sells Guangzhou Circle K network
Fung Group has sold its Guangzhou Circle K-store network to Chinese retailer Suning for an undisclosed sum.
Facing intense competition in the mainland convenience-store market, the network of 61 outlets has failed to make a profit since the brand’s launch there in 2002. The Guangzhou Circle K business recorded a net loss of HK$21.4 million in 2014 before then parent Convenience Retail Asia sold the business to its 41-per-cent shareholder Fung Group the following year for $48 million (US$6.12 million). Since then, Fung Group has closed at least 12 stores there.
Suning Xiaodian, Suning.com’s convenience-store business, will take over the Guangzhou Circle K stores, broadening its footprint in the city.
Convenience Retail Asia continues to own and operate more than 300 Circle K stores in Hong Kong, Macau and Zhuhai.
The president of Suning’s consumer-goods business, Bian Nong, said Circle K’s experience in merchandising, supply chain and store management will supplement Suning’s existing operations in Guangzhou.
Suning has been rapidly expanding its brick-and-mortar store business in recent months, acquiring supermarkets from Carrefour and the Chinese business of Spanish grocer Distribuidora Internacional de Alimentacion.