Retailing, Franchising, and Consumerism Business Intelligence in China

Chinese Retailer Takes Larger Stake In Japanese Chain

Chinese home appliances and electronics retailer Suning has announced plans to buy 179 million additional shares from Laox, Suning's subsidiary in Japan, at the price of JPY35 per share.

The transaction will reportedly involve about CNY503 million, and Suning will become the controlling shareholder of Laox with a 51% stake.

In June 2009, Suning purchased 66.67 million shares at the price of JPY12 per share from Laox, gaining a 27.36% stake in the Japanese company. Laox was founded in 1930 and it is one of the home appliances chains that have the longest history in Japan. Unlike China's Suning and Gome which focuses on traditional home appliances, Laox also provides animation products, musical instruments, watches, and daily commodities.

Sun Weimin, vice chairman of Suning, said that Suning will introduce Laox into China to realize a dual-brand strategy. At the same time, it will strengthen Laox's distribution in Japan to lay a foundation for the internationalization of this brand.

Suning plans to establish a Chinese headquarters for Laox and announced its development plan for the next five years: by 2016, Laox is expected to open 150 stores in 25 Chinese cities, including Beijing, Shanghai, and Guangzhou. At present, Laox is selecting sites in these major cities and will open two to three stores at the end of this year.

Sun said Laox can make independent procurement and share Suning's backstage facilities; and the two parties will learn from each other's operating and management models. He said as a country with strong home appliances manufacturing and consuming power, Japan's retail operating and management model is a good example for Chinese electronic retail enterprises.

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