Nanjing-based Suning Appliance is to take over Citicall Retail Management, one of the oldest and biggest retail players in Hong Kong, in a HK$35 million deal that will give it a foothold in the city's crowded market. The unexpected sale of 33-year-old Citicall by Tang Shing-bor, dubbed 'the king of commercial property', effectively means Tang is withdrawing from the retail sector. Suning, which is listed on the Shenzhen Stock Exchange, planned to expand the sales network of Citicall from 22 now to about 50 in three years and pledged to retain the retailer's 300 employees, Suning president Sun Weimin said. Sun declined to specify the size of future investments. Tang's son, Stan Tang Yiu-sing, said the family would focus on commercial investments. The family, through Success Group, is active in dealing in retail shops and office buildings in prime areas such as Mong Kok and Causeway Bay. 'We were reluctant to cut the deal, but we had to after making the decision to concentrate on the property business,' said Stan Tang. The Tang family took over Citicall three years ago. Stan Tang said Citicall generated HK$1.3 billion in sales per year and was profitable. Citicall was started in Mong Kok in 1976 as a distributor of photographic equipment and audio and has risen to become one of Hong Kong's top three players in the sales of consumer appliances, computer and communications products. Control of Citicall was strategically important to Suning, which runs about 900 stores in 300 cities across the mainland. 'Hong Kong is our bridgehead to branch out of the mainland,' Sun said. Suning is buying the brand name and network of Citicall and is still negotiating a price for the inventory, which the vendor said was worth about HK$140 million. The Citicall deal is Suning's second acquisition in six months after paying 800 million yen (HK$65.14 million) for 27.36 per cent of Laox, a loss-making electronics retailer in Japan. In Hong Kong, where about 940 retailers share HK$25 billion annually from selling consumer appliances, computer and communications products but bear hefty rental and labour costs, Sun still sees room to win market share. To minimise costs and maximise efficiency, Suning would integrate Citicall's sourcing and inventory management with the group's platform, Sun said. Suning will cross swords with chain stores such as Gome Electrical Appliances, Broadway, Fortress and Chung Yuen Electrical. For example, Broadway runs 23 shops, Chung Yuen 14 and Gome 11 across the city. The Citicall deal also sets the stage for Suning to compete with arch-rival, Gome. Both are among the largest home appliance chain stores across the border. Sun said Suning was attracted to the large number of mainland visitors to the city, who make up half of about 30 million inbound tourists annually. Handsets, digital cameras, laptops and audio and visual gadgets are favourites of mainland shoppers in Hong Kong.