A retail unit of blue-chip developer Henderson Land is acquiring Japanese retailer FamilyMart Uny Holdings Co’s operations in Hong Kong for HK$300 million ($38 million), expanding Henderson’s department store business to Hong Kong Island and Kowloon.
The Henderson subsidiary, Urban Kirin, is buying Uny (HK) Co from FamilyMart Uny, the holding company established through the merger of convenience store operator FamilyMart and department store operator Uny in 2016, according to a statement by the Hong Kong developer.
Through the acquisition, the developer will obtain the exclusive right and licence to use certain trademarks for the Uny stores in Hong Kong for a term of 10 years, as well as a master supply agreement for Uny’s supply of certain products from Japan to the stores.
“The acquisition is expected to further strengthen the position of the group in the local retailing industry,” said Henderson in the statement. “Taking advantage of the sound experience and valuable merchandise sourcing experience of the target company, the acquisition will produce synergy effect. There are potential synergy and cost-saving opportunities for merchandising and other back office functions.”
Japanese Giant Sheds Four Stores on HK Island and Kowloon
The Japanese retailer’s Hong Kong unit, established in 1985, runs four department stores in the territory under the brand names Apita, Piago, Uny and Watashi To Seikatsu.
The stores are located in Cityplaza in Quarry Bay and Provident Square in North Point — both in eastern Hong Kong Island — along with Telford Plaza in Kowloon Bay and Lok Fu Place in central Kowloon. The products sold range from toys, stationery and kitchenware to clothing and food. The Japanese company typically rents a large amount of space in malls to accommodate its variety of products. Its Piago store in Telford Plaza spans 70,000 square feet (6,503 square metres).
Uny Hong Kong yielded an operating profit of just over 500 million yen ($4.53 million) with sales of around 15 billion yen ($137 million) in the fiscal year of 2017. The sale of Uny (HK) will close the chapter on FamilyMart Uny’s overseas department store operators, after the Tokyo-based firm sold off its department store operations in Shanghai.
Henderson Expands Department Store Network
The acquisition is set to expand the market share of Henderson Land’s department store business in Hong Kong, while giving the business a presence into Hong Kong Island and Kowloon. The developer’s Henderson Investment Limited arm has its own flagship department store, Citistore, which operates six branches, five of them located in residential districts in the New Territories far from the city centre.
Citistore’s profit after tax in 2017 fell by 24 percent to HK$74 million ($9.4 million), despite the company’s “relentless efforts in raising efficiency and controlling operating costs,” according to Henderson Land’s latest annual report.
Revenue contribution from the department store operation also declined by four percent during the period to HK$834 million ($106 million). The company attributed the slump to weaker retail market sentiment in Hong Kong during the first three quarters of last year.