Lifestyle targets expansion on the mainland after income grows 38pc

Lifestyle International Holdings, one of Hong Kong's largest department store operators, said it would continue to expand across the border after posting 38.4 per cent profit growth last year with earnings exceeding HK$1 billion for the first time.

Robust consumption locally and on the mainland raised earnings above expectations to HK$1.024 billion for the year ended December, from HK$740 million in the previous year. Sales, including concessionary income, jumped 22.6 per cent to HK$6.781 billion.

The Sogo department store operator said it would maintain capital expenditure at HK$2 billion per annum to expand in the mainland market, which is expected to account for 30 per cent of sales by 2009 from 13.5 per cent now.

Managing director Thomas Lau Luen-hung said the company was in talks to buy three to four projects but declined to elaborate.

'Sentiment is most important for the retail business,' Mr Lau said. 'Economic development in today's China creates a positive feeling for people to consume.'

Lifestyle, which has two Sogo stores in Hong Kong and one in Shanghai, will open three stores in Dalian, Suzhou and Tianjin this year and a fourth in Shenyang in 2012.