Suning to open new Laox stores

Suning Appliance Co Ltd, China's largest consumer electronics retailer, said it will open up to 30 Laox shops this year, in a move to further expand its shopping mall business.

Under the current expansion plan, Laox will open 18 to 30 stores in Beijing, Shanghai, Nanjing, Tianjin, Chongqing, and Chengdu this year. The size of each store will be between 10,000 to 20,000 square meters, according to the company.

Laox, a Japanese retailer acquired by Suning in 2011, opened its first store in Beijing on July 20. The lifestyle shopping center sells home appliance, toys, gold, watches, musical instruments and various household goods.

"Laox is essential to increase Suning's product lines," said Sun Weimin, Suning's vice chairman. "In addition, Laox will help us gain more knowledge of the overseas markets and help us build a team for overseas expansion, which will be important for Suning's internationalization in the coming decade."

Experts said that the Nanjing-based company plans to incorporate Laox's upstream design and manufacturing capabilities into its supply chain, as part of an effort to build a global retail business. Suning is also trying to draw on Laox's experience in store design, management, and customer service.

"The core management of the home appliances and shopping mall businesses is very similar," said Wang Hongtao, an industry expert and press officer of the China Chain Store and Franchise Association. "In addition, the future development of the shopping mall business is looking better in the country."

Suning and its parent Suning Appliance Group acquired a combined 257 million shares in Laox for 9 billion yen ($111 million) last year.

In April, the home appliance giant released its first-quarter financial results, showing that its sales revenue hit 22.64 billion yuan ($3.55 billion), a jump of 10 percent compared to the same time in 2011. Its net profit was 951 million yuan, down 15.3 percent compared with the same time the previous year.

Since Suning started operating in 1990, it has opened about 1,700 stores in the Chinese mainland, Hong Kong and Japan by the end of March.