The Vietnamese unit of Parkson, Malaysia's largest department store chain, closed its Hanoi store out of the blue last week, leaving traders only a weekend to move out of the facility, citing unsatisfactory business results.
Parkson Vietnam Co. Ltd. announced in a document released on Friday that it had terminated the booth leasing contracts with traders, requesting that the sellers cease business and “remove fixture [sic] and stocks” from the shopping mall, located in the 72-story Keangnam Hanoi Landmark Tower, by the end of Sunday.
The Parkson Landmark 72 was inaugurated on December 2, 2011 and had not had a single day “registered with any sales that could achieve our expectation,” general director Tiang Chee Sung said in the document obtained by Tuoi Tre (Youth) newspaper.
The executive added that he understood traders had “also been suffering huge losses since then.”
“In view of this situation and after deliberate consideration by the management of Parkson Landmark, we regret to inform you that the entire store will cease its business operations,” the announcement reads.
Like many other shopping malls in the Vietnamese capital city, the Parkson store was rarely crowded with shoppers and visitors.
At times there were only a few dozen visitors in the 24,400 square meter mall, according to observations by Tuoi Tre.
Nguyen Van Son, one of the traders at Parkson Landmark 72, was angry that he had to cease business so suddenly.
“I admit sales were not as good as I had expected and I did have plans to close my store, but the announcement came unexpectedly,” he complained to Tuoi Tre.
“I did not have enough time to find a new place to store my stocks.”
Parkson Vietnam did not say whether it would reopen the store at the Keangnam Hanoi Landmark Tower.
Nguyen The Cuong, head of the market watchdog of Nam Tu Liem District, where the Parkson mall was located, attributed its sudden shutdown to a conflict between the tower’s owner, South Korea’s Keangnam Group, and Parkson Vietnam over the lease.
“The two parties failed to reach agreement over the contract so businesses operations had to be suspended,” he told the Vietnam News Agency.
The Hanoi Department of Industry and Trade has yet to be briefed about the close-down by Parkson Vietnam, the Vietnam News Agency quoted its deputy director, Tran Thi Phuong Lan, as saying.
Parkson, headquartered in the Malaysian state of Selangor, boasted a network of 132 stores as of November 30, 2013, according to its website.
Parkson has 38 stores in Malaysia and nearly 100 in big cities in China, Vietnam, Indonesia, Myanmar, and Sri Lanka.
The chain has nine stores in Vietnam, including six in Ho Chi Minh City, one in the northern city of Hai Phong, and two in Hanoi.
On December 22, 2013, Parkson opened its ninth Vietnam store, the Parkson Cantavil in Ho Chi Minh City’s District 2. The US$8 million shopping mall consists of one basement and five floors with a gross floor area of 17,815 square meters.
Asia One Business quoted Parkson as saying in a statement that sales fell in Malaysia and Vietnam, where consumer sentiment remained subdued.
Parkson saw fourth-quarter net profit for 2014 plummet 35.9 percent from the previous year to $3.2 million. Revenue for the three months to June 30 shrank four percent to $99.2 million, according to the Singapore Exchange.