China department store operators face high risk of downgrades: S&P

HONG KONG - Some department store operators in China are moving closer to the triggers for rating downgrades, according to ratings agency Standard & Poor's. It says China's economic slowdown, the Gvernment's crackdown on lavish gifting by officials, and online competition are materially weakening the sales, cash flows, and profitability of department store operators.

"Tightening operating conditions, aggressive expansion appetites, and a
preference for self-owned properties have increased the leverage of many
Chinese retailers," says S&P credit analyst Lillian Chiou.

"As a result, we expect the credit profiles of the department stores that we rate to weaken this year.” www.standardandpoors.com (ATI).