Departmental store operator Zhongmin Baihui Retail Group opened its 10th store in China yesterday, putting itself on a path to expand rapidly in the next two years.

Its 188,000‐square‐foot Quanzhou Xinhua store in a historic part of Fujian province will boost the company's bottom line immediately, and bring the group's total gross floor area (GFA) to 1.7 million square feet. More stores in its Fujian province home base are on the way.One of them will have a KTV and a cinema.
The company is planning to move from the Catalist board to the main board later this year, with directors having sold shares recently to meet free float and shareholder base requirements. But executive chairman Lee Swee Keng preferred not to talk up his company's success.

The company may have 10 stores up and running, but only three, not including the latest, have been accounted for on its financial statements ‐ the third one just barely as it opened last September. Six stores are still being held by a private company incorporated in China, and will be slowly consolidated into the group's results as regulatory issues are sorted out. They currently pay the company one million yuan (S$200,630) a year each in management fees.

By next month,two stores from that company will be added into the group. And by the end of the year, two new stores opened will be brought in, and at least two more in 2014 for a total of 10. Gross sales proceeds should double to between 800 million yuan and one billion yuan by the end of this year, Mr Lee added.

The company gets its revenue mainly through direct sales of its own supermarket and electrical appliance products, commissions from sellers of branded goods, and rental income. It is looking to lease more spaces in Fujian province, targeting places that are less developed.

Source: AmFraser