Suning.com takes over Wanda's department store business

Zhang Jindong, chairman of China's leading home appliance retailer Suning.com (002024), announced Tuesday that the company had bought out all of the 37 department stores owned by the Chinese real estate conglomerate Wanda Group, the China Securities Journal reported Wednesday.

The company has yet to reveal the price of the deal, saying that it is not mandatory for it to disclose the price under the rules of the Shenzhen Stock Exchange where its stocks are traded. But it promised to publicize the deal price in one of its financial statements during 2019.

The purchase of Wanda Group's department store business is the latest major step taken by Suning.com in its bid to build an all-encompassing retail business landscape.

The company noted that the deal would help it seize more high-quality settings where shopping happens and propel the reform of its supply chain.

The move is also certainly in line with the company's objective for 2019. A month ago, Zhang announced that Suning.com planned to open as many as 15,000 brick-and-mortar storefronts nationwide this year.

For Wanda Group, the deal means that the group has finally spun off its department store division which has been shrinking substantially in recent years.

Founded in 2007, the department store division used to be one of the four pillars of Wanda Group's overall business. 

The group's annual financial statement for 2014 shows that its 99 department stores across the country generated a total of 25.6 billion yuan (3.78 billion U.S. dollars) that year, a year-over-year increase of 65.3 percent.

However, as China's department store industry entered a recession in 2015, the group began to trim the number of its stores gradually.

The remaining 37 department stores are all located in the downtown areas of some of China's first and second-tier cities with more than 4 million customers still holding the membership of these stores.

Analysts believe that as one of China's most popular online retailers, Suning.com will also accelerate the digitalization of these department stores.