Chinese department stores face lengthy sales slump, says S&P

HONG KONG - Revenue prospects will be increasingly gloomy for China's department stores over the next 12-24 months, according to a report published today by Standard & Poor's Ratings Services, which says  slower sales growth and intensifying competition have already tightened the profitability of major retailers, which include four companies rated by S&P: Parkson Retail Group, Golden Eagle Retail Group, Intime Retail (Group) Co, and Maoye International Holdings.

"We expect financial performances across the sector to weaken as slowing economic growth and the central Government's measures to combat extravagance and corruption continue to eat into the sales of high-end goods," said S&P credit analyst, Lillian Chiou.
Total sales of retail consumer goods in China grew by 13.1% in 2013, the slowest rate since 2005, while growth in department store sales dropped to 10.3% from 12.6% in 2012. However, online retail sales grew 31.9% in 2013. www.standardandpoors.com (ATI).