Hong Kong - Parkson Retail Group Ltd., the Beijing-based department-store chain controlled by Malaysia's Lion Group, will accelerate its expansion in China in the next three years.

The company will open 8 to 9 stores a year through 2013, after opening 5 last year, Managing Director Alfred Cheng told reporters in Hong Kong on Monday. The retailer said 2010 net income jumped 9 percent to 992 million yuan ($151 million), compared with the 1.07 billion yuan average of 13 analyst estimates compiled by Bloomberg.

Parkson is opening more stores in China as spending on clothes, cosmetics and home appliances surges. The number of middle-income and affluent consumers in the nation, which overtook Japan as the second-biggest economy in 2010, could almost triple over the next 10 years, according to Boston Consulting Group Inc.

The company will spend as much as 500 million yuan this year on new stores and remodeling existing outlets, Cheng said. It invested 300 million yuan on expansion last year.

"Of course the store opening program will bring short-term pain," Cheng said. "But we believe that in the longer term, the strategy is correct."

The company's China expansion will "rejuvenate" its stores and sustain earnings growth in the medium term although startup costs will be a "drag," Mabel Wong, a Hong Kong-based analyst at Deutsche Bank AG, said in a research report Feb 14.

The Hong Kong-listed company has 47 self- owned and managed stores in 30 Chinese cities selling clothes, cosmetics, accessories, groceries, and household and electrical goods.

Bloomberg News

(China Daily 02/22/2011 page15)