A view of Parkson Paragon building in Phu My Hung New Urban Area. — Photo cafef.vn

HCM CITY (Biz Hub) – A HCM City-based unit of Parkson, Malaysia's largest department store chain, was officially shut down on May 16 after five years of operation in the Phu My Hung New Urban Area.

According to the Thuy Duong Company, which operates Parkson Paragon building, the relocation plan was announced to traders two months ago and had received their agreement.

The relocation does not affect other department stores under the management of Parkson in Viet Nam. The benefits to Parkson membership card holders remain unchanged, according to the company.

In 2011, Parkson began managing the Sai Gon Paragon with an investment of US$5 million. It changed the name of the trade centre to Parkson Paragon. The management contract was reported to be for 19 years. However, the investor decided to shutdown the building after just five years.

The Sai Gon Paragon was inaugurated in 2009 on a 6,000sq.m. plot of land at the corner of Nguyen Luong Bang and Hoang Van Thai in District 7. Khaisilk Corporation and Thuy Loc invested in the building.

In January 2015, Parkson Viet Nam Co. Ltd. announced its decision to close the department store in the 72-storey Keangnam Ha Noi Landmark Tower since it had failed to reach its expected revenue target.

Between 2005 and 2010, Parksons expansion was very smooth in Viet Nam. However, since 2011, with the global economic downturn, purchasing power reduced. The companys revenue also reduced since the lease amount remained high.

Also, the department store chain failed to meet the shopping demands and the habits of Vietnamese consumers, who began preferring integrated shopping malls with multiple features to those selling only clothes and cosmetics.

Parkson, headquartered in the Malaysian state of Selangor, boasted a network of 132 stores as of November 30, 2013. Parkson has 38 stores in Malaysia and nearly 100 stores in big cities in China, Viet Nam, Indonesia, Myanmar, and Sri Lanka.

The chain has nine stores in Viet Nam — six in HCM City, one in the northern city of Hai Phong, and two in Ha Noi. — VNS