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SCMP Reporter

JAPANESE general merchandise store chain Jusco Stores is to seek a separate primary listing for its Hong Kong operations in the territory within the month.

  Nomura International (Hong Kong) and Wardley are to act as co-sponsors.

  A prospectus containing extensive listing details will be released next Tuesday.

  Tatsuichi Yamaguchi, managing director of Jusco Stores (Hong Kong), said the funds raised would be used primarily to open new stores in Hong Kong and perhaps southern China.

  A small amount would go towards repaying bank borrowings.

  The chain has four mega-stores in the territory and plans to increase this to at least nine by 1999.

  It also has been eyeing opportunities in Guangdong province. However, its drive into southern China hinges on talks under way between Jusco (Japan) and a number of potential mainland joint-venture partners.

  Jusco is looking at dividing China into three operational areas, with its Hong Kong-listed company given freedom to exploit profits from Guangdong.

  Herbert Hui Ho-ming, executive director and head of the listing division at the stock exchange, welcomed the announcement.

  He said the addition of an international company of Jusco's calibre would add to the reputation of the exchange.

  Jusco is one of the largest retailers in Japan and 83rd largest company in Asia.

  ''This kind of listing represents a step towards meeting our goal of listing more counters with famous international names,'' said Mr Hui.

  ''It is important for an exchange to have more than one kind of listing for investors to choose from.''   Of the 485 companies listed in Hong Kong, all but a handful are Hong Kong and China companies.

   Jusco opened its first store in Hong Kong seven years ago. It now has general merchandise stores in Kornhill, Lok Fu, Tsuen Wan and Tsim Sha Tsui.

  While Guangdong offers Jusco much potential, Mr Yamaguchi said over the next few years the company would concentrating on expanding in Hong Kong.

  Jusco would target the new towns in the New Territories to reflect the population shift from Kowloon and Hong Kong Island, he said.

  The company is negotiating with one potential landlord to open its next store in 1996.

  Additional stores might open before this should retail space in good locations become available unexpectedly, Mr Yamaguchi said.

  He said the company's main business would remain on the retail side. Retail premises would be leased, not bought, to keep costs down.

  The new stores would be at least 7,000 or 8,000 sq metres and cost about $80 million to fit out each, excluding the cost of stock.

  Jusco's turnover for the year to the end of February 1991 was $647.9 million. It jumped 76 per cent to $1.14 billion to February 1992 before edging up a further 10 per cent to $1.25 billion last year.

  Turnover for the first half, to August 31 last year, was a hefty $684 million.

  Given that Jusco traditionally generates about 70 per cent of its earnings from the second half because of Christmas and Lunar New Year sales, the company is heading for an 81 per cent rise in turnover to about $2.28 billion for this financial year.

  The company is tight-lipped about its net profits record until next week's formal listing announcement.

   However, Mr Yamaguchi did reveal its gross profits on sold merchandise were normally 27 per cent on ordinary products and 37 per cent on its own brands.



Jusco eyes listing in HK to finance expansion scheme