Merger to create Chinese retail giant
Department store groups united in face of foreign retail growth
The merger of two department store chains is to create China’s biggest chain.
Bailian Group is creating a new business unit called the Shanghai Brilliance Group, formed by the merger of the Shanghai Hualian Co with the Shanghai No 1 Department Store Co.
The new unit will operate 14 department stores and three shopping malls, with combined sales of 4.2bn yuan, around $500m.
The move reflects China’s domestic retailers seeing the benefits of both national branding and economies of scale in the face of the growth of chains operated by foreign retailers.
Wal-Mart, Carrefour, Ikea and Kingfisher are among the groups developing store chains in China, with Tesco also known to be looking for a point of entry. Investment and expansion will become easier for non-Chinese retailers later this year under concessions agreed as part of China’s admission to the world trade organisation.
[img r]hualiansupermarket.jpg[/img]Bailian, China’s largest retailer, was established last year through the merger of state owned companies operating the Shanghai No 1 Department Store, Hualian Department Store, and Hualian and Lianhua supermarket chains. It operates more than 4,300 outlets in China with sales last year of 48.5bn yuan, around $5.8bn.
