New World Department Store China Limited (“NWDS” or the “Company”; Hong Kong stock code: 825), one of the largest owners and operators of department stores in the PRC, is pleased to announce its acquisition of the operating company of Kunming New World Department Store (“Kunming Store”) and Ningbo New World Trendy Department Store (“Ningbo Trendy Store”) from parent company, at a consideration of HKD3,000,000 and RMB2,000,000 respectively. The total sum for the acquisition will be funded by internal resources of the Company.

Being the capital of Yunnan Province, Kunming City is the political, economic, cultural, technology and transportation hub of the province. Opened in June 2004, Kunming Store is the Company’s first department store in Southwestern China. It has a gross floor area (“GFA”) of approximately 12,600 sq.m. The store positions itself at the mid-high market, targeting consumers with modern lifestyle and is designed to be a leading fashionable department store.

Ningbo Trendy Store commenced operation in November 2004, which is the Company’s second department store in Ningbo city. It occupies 4 storeys with a GFA of approximately 10,600 sq.m. Located at Zhongshan Dong Road (中山東路), well known as “The First Street of Zhejiang” in Ningbo City of Zhejiang Province, the store is surrounded by clusters of commercial buildings and leisure and entertainment facilities. It is well-located to benefit from the flourishing economy of the city. Ningbo Trendy Store positions itself at the mid-high market, offering a group of national and international brands with a focus on young and stylish merchandise, emphasizing its image as an exquisite fashion department store.

Commenting on the acquisition, Mr. Adrian Cheng, Executive Director of NWDS, said, “Since the successful acquisition of Wuhan Store’s property and operation in February 2008, the Company have been preparing actively for acquiring the remaining stores managed for our parent company. Kunming is the first city where the Company started business in Southwestern China whilst Ningbo is the city where we laid a foothold for Eastern China Region in our early years, therefore we have established sound business foundation in both cities. The acquisition of Kunming managed store and Ningbo Trendy managed store act as a driving force for further development in both regions. In future, the Company will endeavor to expand its business by carrying out the “multiple presences in a single city” and “radiation cities” strategy, aiming to be a dominant operator among China’s department chain stores.”

Mr. Philip Cheung, Managing Director and Executive Director of NWDS, added, “The acquisition of Kunming Store implies that the Company will own its first self-owned store in Southwestern China Region, which helps consolidate NWDS’ market position in the Southwestern part of China and is going to facilitate our long-term development in the region. Whereas the acquisition of Ningbo Trendy Store can further enhance the Company’s influence in Zhejiang Province, together with the new store in Taizhou that will have grand opening in the first half of 2009, the Company will operate 3 self-owned stores in Zhejiang.” 

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