Tuesday, February 24, 2015

Correspondence with Parkson Retail Asia IR

Below is my correspondences with IR. They avoid my questions, but I guess to be fair, I do not expect response to the second query. 
But I think in the first query, they are trying to assure us that most tenants are still with them. 

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Qn:

Hi 
I am Mike, a retail investor. I refer to the following articles

http://m.thanhniennews.com/society/retailers-angry-following-parksons-sudden-closure-of-hanoi-tower-37164.html

http://www.talkvietnam.com/2015/01/public-condemns-malaysian-retailer-for-shutting-down-parkson-landmark/

Maybe the IR can shed some lights on how this could have happened, and what are the implications on Parkson.

Ans:

Dear Mike,

 

We refer to your earlier email dated 15 February 2015 as well as a similar enquiry you’ve made to Parkson Retail Asia’s (PRA) management. You would be pleased to know that PRA’s management has reverted to us on your earlier enquiry, and that we’ve also communicated your latest enquiry to them.

 

On behalf of PRA, we wish to clarify that the closure of the Landmark-Keangnam store in Hanoi was done in the interest of the Company and by extension, it's shareholders. As the rental payable for the store was unsustainable due to the weak discretionary retail spending in Hanoi, PRA tried re-negotiating with the landlord to revise the rental rate to a reasonable level such that it could be a win-win situation for all stakeholders. However, PRA found that a favourable response from the landlord was not forthcoming, and hence decided to close the store on 2 January 2015 to preserve the profitability of their Vietnam operations.

 

PRA has explained the situation leading to this store closure to its tenants and found that the majority of them understood its predicament and its resulting action to close. PRA would like to note that its relationship with its tenants span many years, and that many of the tenants previously operating in the closed Landmark-Keangnam store are also tenants in PRA’s other 9 stores spread across the cities of Ho Chi Minh, Hanoi, Hai Phong and Danang in Vietnam. These tenants continue to work with and support PRA in Vietnam. Parksoncontinues to be the premier department store in Vietnam since the first store was opened in 2005 and PRA wishes to assure you that all actions taken are in the interest of the Company while protecting its reputation with its customers.

 

The management of PRA hopes for your understanding regarding their actions on the closure of the Landmark-Keangnam store, and they would like to thank you for your interest as a shareholder in keeping abreast of the Company's corporate developments.

 

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Second query:


Dear Wilson,


Happy New Year, Gong Xi FA CAi. Thank you for your reply. I understand. I would like to know the impact of Vietnam Withdrawal. From my preliminary research, given Keangnam tower Parkson has a key able area of 28700 square meter and an average rent of 60 USd per month, a year rents could amount to 27 mio sing dollars in a year. That's pretty scary. 

Imagine the amount of compensation.

Source:

Perhaps some light can be shed on the amount of compensation.

Regards,
Mike

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And:

Dear Mike,

 

You’d be pleased to know that Parkson Retail Asia’s (“PRA”) management has responded on your email enquiry dated 20 February 2015 relating to compensation. While they are of the view that any discussion of compensation is premature at this point, they would like to assure you that the Company will comply with SGX’s disclosure requirements with regards to material information.

 

PRA’s management would also like to thank you for your continued interest as a shareholder in their company. Please let us know should you have further questions for the management.

 

 

Warmest Regards,


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It will be out of bounds for me until there is clarity on compensation.


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