Retailing, Franchising, and Consumerism Business Intelligence in China

Suning Plans To Raise RMB2.4 Billion For Franchise Development

Domestic electronics retailer Suning has released an announcement saying that it will issue no more than 73 million A shares, worth RMB2.431 billion, for developing 250 franchise chain stores and a logistics center in Shenyang.

Suning will use RMB1.5 billion of the money to open 250 chain stores in north China, northeast China, northwest China, east China and south China, which will add a total of 815,000 square meters of business area for the company and bring an additional sales income of RMB18.625 billion. It will also spend RMB810 million to buy two big stores in Shanghai and Wuhan which are expected to bring RMB1.1 billion annual sales for Suning upon completion. This is the first time that Suning plans to expand a market through purchasing new stores.

Fan Zhijun, executive president of Suning in Northern China Region, says that Suning will also seek big stores in Beijing for further expansion.

Lu Renbo, deputy director of the Development and Research Center of the Marketing Division of the State Council, has told local media that compared with renting a store, purchasing stores will save the electronics retailer about RMB10 million each year and the investment in the store purchase usually can be returned in 5-6 years.

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