Suning seals Citicall takeover in HK
By Pan Xiaoyi |
March 3, 2010, Wednesday
|
Print Edition
Print Edition
SUNING Appliance Co has completed its takeover of Hong Kong-based Citicall as it intends to position Hong Kong as its base to expand internationally.
The Nanjing-based retailer said it has finished integrating suppliers, inventories, assets and work force and has set up an office in Hong Kong.
Apart from the existing 22 Citicall stores, Suning plans to add 10 annually in the following three years in Hong Kong. It will introduce to Hong Kong the Suning Elite outlet - a smaller store which sells higher profit margin products.
Hong Kong will be a vital platform for Suning's ambitions to go abroad. In June, Suning gained a controlling 27.36 percent stake in Japan's Laox through a Hong Kong subsidiary.
Suning hopes to learn from the experience of running the operations in Hong Kong to better prepare the firm for global competition, said Zhang Jindong, chairman of Suning.
"As overseas retailers compete in the domestic market, Chinese electrical appliance retailers should also be able to compete internationally to become world-class enterprises," said Zhang in Hong Kong.
Suning said it is on track to achieve its goal of turning Laox profitable three years after the takeover. Sales during the Spring Festival rose 50 percent annually in Laox after improving its retail network and product mix.
Citicall Retail Management is one of the three largest electrical retailers in Hong Kong, with sales of HK$1.3 billion (US$167 million) in 2008.
Nationwide, Suning targets to generate 150 billion yuan in sales and to operate 1,200 stores in 2010.
The Nanjing-based retailer said it has finished integrating suppliers, inventories, assets and work force and has set up an office in Hong Kong.
Apart from the existing 22 Citicall stores, Suning plans to add 10 annually in the following three years in Hong Kong. It will introduce to Hong Kong the Suning Elite outlet - a smaller store which sells higher profit margin products.
Hong Kong will be a vital platform for Suning's ambitions to go abroad. In June, Suning gained a controlling 27.36 percent stake in Japan's Laox through a Hong Kong subsidiary.
Suning hopes to learn from the experience of running the operations in Hong Kong to better prepare the firm for global competition, said Zhang Jindong, chairman of Suning.
"As overseas retailers compete in the domestic market, Chinese electrical appliance retailers should also be able to compete internationally to become world-class enterprises," said Zhang in Hong Kong.
Suning said it is on track to achieve its goal of turning Laox profitable three years after the takeover. Sales during the Spring Festival rose 50 percent annually in Laox after improving its retail network and product mix.
Citicall Retail Management is one of the three largest electrical retailers in Hong Kong, with sales of HK$1.3 billion (US$167 million) in 2008.
Nationwide, Suning targets to generate 150 billion yuan in sales and to operate 1,200 stores in 2010.
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