CHINA Resources (Holdings) is reorganising its retail operations by grouping its five department stores in Hong Kong into a new company, CRC Department Store. Wei Jianan, executive director of China Resources, said the restructure would merge China Products Co (HK) and Chinese Merchandise Emporium. CRC, to be launched on January 8, would have a modern image to go with a face-lift of its stores, he said. Three stores are now under China Products Co and two under Chinese Merchandise Emporium. Total staff is about 1,000. Analysts believe the merger is a prelude to a possible future listing of China Resources' retail operations. Mr Wei said there was no immediate plan to list as the merger was intended to consolidate and strengthen the department store business. The merger would enhance management and operating efficiency and raise its competitiveness, he said. Mr Wei said: ''We have been providing a comprehensive range of value-for-money products to Hong Kong people and we will continue to do so. ''But we have to push ahead with reforms to meet competition and cope with changes in consumption and increasing living standard of people.'' Mr Wei, who is also chairman and general manager of CRC, said it was offering staff training to improve customer service, reinforcing its merchandising strength and diversifying product variety. The company would also target younger-generation consumers to widen its spectrum of customers, he said. Mr Wei is also in charge of China Resources' other retail businesses, including seven outlets of Chinese Arts and Crafts (HK) and 40 supermarkets in the territory. ''There are differences in the operation of these retail businesses, and the positioning of their markets is different too,'' Mr Wei said. He would not rule out the possibility of grouping these businesses in a further reorganisation, but said the present focus was the department store merger. The merger would pave the way for a planned expansion into the Chinese retail markets, he said. Huang Zilong, a director of CRC, said it was negotiating with Sun Hung Kai Properties and a Beijing partner for the joint acquisition of a shopping complex in the southern part of the Chinese capital. He said it intended to take a 20 per cent stake in the 190,000 sq ft complex, which incorporates a 100,000 sq ft department store. CRC would invest about $50 million for the operation of the Beijing store, he said. Its five Hong Kong department stores, with a total of 280,000 sq ft of shopping area, are in Causeway Bay, Central, Mongkok and Tsuen Wan. Four of them, representing about 200,000 sq ft of space, are self-owned properties. The group is spending $10 million to upgrade its store on Sugar Street, Causeway Bay. Renovation of other stores will follow. CRC has a 25 per cent interest in a joint-venture company, Sun Yue Wa Co, which was recently formed to invest in shopping centre projects in China. Other shareholders in the venture include Sun Hung Kai Properties and Guangdong Light Industrial Products. Established in 1948, China Resources now has 30 principal subsidiaries and some 10,000 employees in Hong Kong. It is one of the largest and most diversified companies in the territory, with a turnover of $50 billion last year. Its major shareholders include 15 of the largest mainland government corporations. On March 31, China Resources had total assets of about $22 billion.