ParknShop chain may be up for sale

Hutchison Whampoa, a multinational conglomerate controlled by Asia's richest man, Li Ka-shing, confirmed over the weekend that it is considering selling Hong Kong's ParknShop supermarket chain.

According to a statement the company posted on its website Saturday, its subsidiary A. S. Watson & Co (ASW), which owns ParknShop, is conducting a strategic review of the supermarket chain in order to "optimize value for shareholders."

"ASW has not yet set a definite timetable for completion of its review and there can be no assurances that the process will result in any transaction being announced or completed," the statement said.

Hutchison Whampoa also denied previous market speculations claiming that the company is exiting Hong Kong, calling the rumors "groundless."

ParknShop, which operates 345 stores and recorded a revenue of HK$21.7 billion ($2.8 billion) in 2012, could fetch up to $4 billion, said an unnamed insider cited in a Saturday Wall Street Journal report.

Li Weihua, a professor with the Franchise Research Center of the China University of Political Science and Law, told the Global Times Sunday Hong Kong's saturated retail scene might constrain the growth of the supermarket chain.

"The $3 billion to $4 billion gained from the sale could be used in other markets with stronger growth potential, such as in the financially struggling Europe," Li said.

A supermarket chain from the Chinese mainland might take what Li Ka-shing has to offer, he added.

Hong Tao, a professor with Beijing Technology and Business University, told the Global Times Sunday that mainland retailers including Suning Commerce Group are interested in using Hong Kong as a stepping stone before they go international.