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Parkson Holdings, a Malaysian department store operator with outlets across Asia, is expected to close its third store in Vietnam next month after earnings in the market slumped, according to local media reports.
Parkson Viet Tower, as the store is known, was opened eight years ago and is currently the company's only location in Hanoi.
Its sales in Vietnam for the quarter ended on March 31 this year fell by 8.2 percent from a year earlier. The retailer posted a pre-tax loss of about VND80 billion ($3.5 million) for the period, the Saigon Times cited Parkson Asia Limited’s financial statement as saying.
There are several possible factors behind the poor performance.
Overall sales at department stores have been stagnant due partly to the rapid growth of online shopping.
Last year, Vietnamese consumers spent $4.07 billion shopping online, a jump of 37 percent from the previous year, according to the 2015 Report on Vietnam E-commerce. It is projected that 30 percent of the population will buy goods and services directly over the internet in 2020.
In addition, Vietnam’s retail market has become increasingly competitive with several other foreign companies targeting overlapping segments, including South Korea’s Lotte, Thailand’s Central Group, and Japanese retailers Aeon and Takashimaya.
Parkson has had to scale down its business in recent years. Earlier this year, the Malaysian company closed a 19,000-square-meter store in District 7 in Ho Chi Minh City. Last year, it shut down a store in Hanoi after four years of operation.
Parkson reportedly said the latest closure would not affect its eight remaining stores -- six in Ho Chi Minh City, one in the northern port city of Hai Phong and one in the central city of Da Nang.
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