Matahari to launch China retail store in August

Matahari to launch China retail store in August

Dow Jones
Jakarta

Indonesia's PT Matahari Putra Prima plans to enter the Chinese
market with the launch of a department store in the city of
Shenzhen in southern Guangdong province in August, a senior
executive said on Friday.

The planned 10,000 square meter outlet will mark the first
overseas location for an Indonesian retailer, Matahari's Chief
Financial Officer Hendra Sidin told reporters.

"We are open to the possibility of opening stores in other
countries if it's feasible," Hendra said, without elaborating.

Matahari will join the growing list of foreign retailers
seeking to tap surging consumption levels in China powered by
economic growth of 9.5 percent in 2004. China recorded a 12.2
percent on-year rise in retail sales to 466.3 billion yuan in
April, a slight deceleration from the 13.9 percent on-year growth
in March.

China's retail market is attracting greater foreign retailer
interest since the government scrapped restrictions in December
that limited foreign retailers to joint ventures in a restricted
number of cities nationwide. The new rules, part of the
commitments that helped pave the way for China to join the World
Trade Organization in December 2001, permit foreign retailers to
open wholly-owned stores anywhere in China.

Foreign retailers that have already entered the Chinese market
include U.K. supermarket company Tesco and France's Carrefour
S.A.

Matahari's new Chinese operation is part of a Rp 400 billion
(US$42.35 million) to Rp 500 billion expansion strategy that
includes the planned opening of 11 new department stores and 10
hypermarkets in Indonesia in 2005, Hendra said.

He added that the company's sales are likely to rise 25
percent to 30 percent this year from Rp 5.62 trillion in 2004.
Matahari had net profit of Rp 125.34 billion in 2004.

Matahari began as a a small children's clothing store in
Jakarta's Chinatown in 1958 and now operates 79 department stores
and 54 supermarkets, including four hypermarkets, across
Indonesia.