Retail in Asia

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Parkson Vietnam files for bankruptcy

Parkson Vietnam on Friday announced it has filed for bankruptcy in Ho Chi Minh City, signalling an end for the mall operator after 18 years of operation in the Southeast Asian nation.

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Parent company Parkson Retail Asia said the mall has “historically been operating at a loss, with such losses being compounded in recent years due to the challenging business environment as a result of the Covid-19 pandemic,” according to a press release.

The retail group went on to highlight “the lack of support from Parkson Vietnam’s landlord,” such as the “negligible rental rebate or rental reduction during the Covid-19 lockdown when the operation of Parkson Vietnam’s stores was restricted,” which has “adversely impacted Parkson Vietnam’s financials,” the parent firm said, adding “the high land tax imposed by the local government had also added to Parkson Vietnam’s financial difficulties.”

As such, the group said “it is not commercially feasible to continue its operations in Vietnam,” thus resulting in a bankruptcy application. The application is, however, subject to the approval from the relevant authorities in Vietnam, it added.

Parkson Vietnam operations recorded a pre-tax loss of SGD 2.3 million (USD 1.72 million) last year against a pre-tax profit of SGD13.7 million in 2021.

Revenue fell to SGD 2.4 million last year, compare to SGD 10.1 million in 2021, with the latter year’s profit held up by the closure of two stores and the exit from tenancies resulting in de-recognition of lease liabilities, and recognition of income from subleasing assets.

By the end of last year, Parkson Vietnam had a capital deficiency of SGD 30.16 million.

Coinciding with the bankruptcy news, the group said it would now focus on its operations in Malaysia, where it remains “optimistic about the overall market prospects, with improving consumer sentiments and the increasing numbers of foreign tourists.”