China Resources Enterprise (CRE) yesterday agreed to pay HK$326.6 million in cash to acquire 80 per cent of Pacific Coffee from Chevalier Pacific Holdings, a Hong Kong-listed investment holding company.
'Our goal is to become the number one coffee house in China,' said CRE general manager Joyce Chan.
To reach its objective, CRE, a constituent stock of the Hang Seng Index, would have to open hundreds of Pacific Coffee outlets in the mainland, where US coffee chain Starbucks has at least 376 outlets. Pacific Coffee, founded in Hong Kong in 1992, has 95 shops, including 83 in the city and only five on the mainland.
'In each of our major malls in China, we wish to have a Pacific Coffee,' said CRE chief financial officer Frank Lai.
'We have 200 major malls in China. Over the next two to three years, Pacific Coffee will be in major Chinese cities. Pacific Coffee will be well received in China's first and second-tier cities.'
Pacific Coffee's expansion effort on the mainland could benefit from access to the properties of CRE's state-owned parent, China Resources Group, and CRE's retail network, Chan said.
Investment property accounted for 42 per cent of CRE's earnings in 2009, while retail accounted for 10 per cent and beverages 22 per cent.