KUALA LUMPUR (Sept 9): Parkson Holdings Bhd's 54.97%-owned subsidiary, Parkson Retail Group Ltd (PRG), is to sell commercial properties with an aggregate construction area of 76,013 square metres in Qingdao, China for 280 million yuan (RM182 million).
The department store operating on the properties has been suffering losses due to the weakening spending power of local residents as well as the adverse effects of Covid-19 mitigation policies on the retail business, PRG said in an announcement on Friday (Sept 9) that was filed with Bursa Malaysia by Parkson.
"Since the properties are located in an old town area which is subject to urban reconstruction of Qingdao, the residents of the district have gradually moved out from the old town to the suburban area.
"As a result, the spending power of the local residents have weakened and the department store has continued to suffer losses since 2015," added PRG, which is listed on the Stock Exchange of Hong Kong.
PRG's 95.91%-owned subsidiary, Qingdao No 1 Parkson Co Ltd, entered into a sale and purchase agreement with Qingdao Haiming City Development Co Ltd for the disposal, said Parkson in its filing.
"The disposal does not have a material impact on the earnings of Parkson for the financial year ending Dec 31, 2022, and the net assets of the group on the audited consolidated statement of the financial position of the company as at Dec 31, 2021," it added.
Shares in Parkson closed unchanged at 14 sen on Friday, giving the group a market capitalisation of RM160.85 million.