Parkson taps F&B business in China

China

TWO indirect subsidiaries of Parkson Holdings — Grand Parkson Retail Group and AUM Hospitality — have formed a new joint venture for food retailing in China.

Analysts say the teaming up is not entirely surprising. But it is a good move reflecting Parkson’s intention to infuse a lifestyle concept into its retail stores there. It should also boost business and income and enable Parkson to tap into the growing F&B business in China.

P46 ParksonGrand Parkson will own 91% of the new joint venture, Lion Food & Beverage Ventures Limited. The remaining shares will be owned by AUM Hospitality.

Total investment in the new company amounts to RMB40 million and it will be engaged primarily in the establishment and management of restaurants.

Parkson said in a statement to the Malaysian Stock Exchange that F&B is becoming an important component to the shopping experience that the group is offering to its customers.

“Developing the F&B sector will provide synergies with the group’s existing retail business,” the group said, adding that “introducing F&B services will be a major strategic move for the group”.

The partnership will allow Parkson to leverage AUM Hospitality’s expertise and brand resources in the F&B sector.

At the same time, AUM Hospitality can tap into the Parkson retail group’s overseas presence and established network in China.

Parkson has 60 department stores in 36 cities in China while AUM Hospitality has restaurant chains in Malaysia under 12 self-owned and franchised brands, including Johnny Rockets, Quiznos and The Library Coffee Bar.

Parkson’s plan to venture into F&B has been in the works for some time as part of its strategy to transform its traditional department store business.

“Our aim is to enhance our customers’ experience by offering a quality shopping, catering and entertainment experience that encourages repeat customer patronage,” said Parkson. Th is lifestyle concept is particularly relevant in view of the dynamic market situation in China.

Grand Parkson is a wholly-owned unit of Hong Kong-listed Parkson Retail Group, which is in turn owned 52.61% by Parkson Holdings. AUM Hospitality is 60%-owned by Prime Yield Holdings, which is in turn a wholly-owned unit of Parkson Holdings.