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Sandy Li

Owner AS Watson hopes to boost sales from the electrical retailer by 20 per cent with the opening of 32 new outlets

AS Watson Group, the retail arm of Hutchison Whampoa, will spend $100 million upgrading its existing Fortress outlets and opening 32  stores by next year.

Iwan Evans, chief executive of AS Watson's food, electronics and general merchandise division, expects the renovation programme to boost Fortress sales by 20 per cent.

Fortress, founded in 1975, was acquired by Hutchison in 1986 and became a wholly owned subsidiary of AS Watson in 1990.

It is Hong Kong's largest retailer of electrical products with a 32 per cent market share.

'We need a facelift to keep pace with consumer needs,' Mr Evans said on the eve of the launch of a new Tsim Sha Tsui store.

Under the renovation, the 68-store Fortress network will be re-categorised along three formats: Fortress World, which will offer electrical products; Fortress Vision, which will focus on plasma television and audio entertainment products; and Fortress Digital, which will sell mainly high-technology consumer products.

Mr Evans said the group would open  12  Fortress outlets in tourist belts and add 20  shops in non-tourist districts by next year.

He said tourists, mainly from the mainland, contributed 15 per cent of Fortress' turnover.

Mr Evans, who is also in charge of Park'n'Shop Hong Kong and China, said an expansion into 24-hour convenience store operations was still at a trial stage.

In January, Park'n'Shop opened six express stores to challenge 7-Eleven and Circle K, which have more than 600 outlets between them.

'It is unfair to come up with a conclusion because of the Sars situation,' he said.

'But our supermarket in Shenzhen operating round the clock has received a good response since the 24-hour opening of the border crossing.'

Mr Evans said Park'n'Shop had been fined 'a couple of thousand dollars' by the Guangdong government for its involvement in a price war triggered by rivalry between domestic and foreign operators.

Earlier this year, the Guangdong government ordered hypermarket operators to stop selling home appliances and mobile phones at below cost.

The authorities said violators would be fined between 30,000 yuan (HK$28,116) and 300,000 yuan.

store expansions

AS Watson will spend $100 million on upgrades on existing stores and new openings by next year

The group has plans to open 12 new Fortress stores in tourist belts

The company also aims to open 20 new shops in non-tourist districts



Fortress plans $100m upgrade and expansion