Maoye International, a department store chain on the mainland, said the current sluggish property market is favorable for expansion. The company is also planning to acquire more plots of land for new stores.

The Shenzhen-based leading department store will continue to expand in affluent cities to beef up its nationwide retail network. "The current property market on the mainland will benefit us in acquisitions," said Huang Maoru, chairman of Maoye.

In the first half, the company has acquired one plot of land and three properties to set up department stores in Nanshan district in Shenzhen, Nanchong in Sichuan province, Taiyuan in Shanxi province and Qinhuangdao in Hebei province.

The company intends to increase the number of stores to 19 with a total gross floor area of 165,000 sq m extending over 10 cities upon completion and acquisition. "We plan to open 12 new shops in three to five years' time," Huang said.

The aggressive expansion plan is supported by its confidence on retail markets despite the mounting inflationary pressure on the mainland.

"I think it is the best period for the mainland's economic growth in the coming 15 to 20 years." Huang added.

The mainlanders' growing per capita income has boosted the retail market with greater consumption power. Although there are uncertainties over global inflation and economic fluctuation, the company is still optimistic on the long-term development of the mainland's retail market, he said in a statement.

In the first half, Maoye's same-store sales and commissions growth from concessionaire sales was 12.2 percent, while the average rate was 13.9 percent, said Wang Guisheng, chief financial officer of Maoye.

General manager Zou Minggui expected a stronger growth from this area, since strong earthquakes and other natural disasters are not likely to happen again later this year.

Maoye's first-half revenue fell 9.8 percent to 821 million yuan from 741 million yuan a year earlier. The drop was mainly due to a lower automobiles sales because of the Sichuan earthquake and austerity measures.

The department store's net earnings rose to 301 million yuan from 195 million yuan a year earlier, up 54.4 percent as the company booked a 65.6 million yuan gain from the stock investment market that offset the loss in automobile sales.

Its operating profits rose to 417 million yuan from 266 million yuan a year earlier, surging 56.7 percent thanks to enhancement in brand portfolio and marketing promotions.

The company's operating margin increased to 56.3 percent from 32.4 percent last year.

(HK Edition 08/30/2008 page2)