New World Department Store China, the retail operator behind Bali Chuntian and Hongxin Trendy Plaza on the mainland, is moving away from the traditional department store model and towards a hybrid mall business with hopes to double its rental income to compensate for flagging sales growth.
Same store sales growth was 0.4 per cent for the first half ended December due to intensifying competition in the retail market.
"There's more mall space, stand-alone shops, not just e-merchants," New World corporate affairs director Rebecca Woo said at a briefing.
Revenue grew 4.8 per cent from a year earlier to HK$2.13 billion.
Rental income made up 15.2 per cent of that and management and consultancy fees 1.9 per cent, but Woo said the company would focus on the two segments which had a higher margin, adding that the company hoped rental income could account for 30 per cent of group business next year.
"We will not rely on a single source of income," she said.
The firm has been building up its complementary lifestyle offerings by including restaurants, supermarkets, fitness centres, beauty salons and children's playgrounds in its retail space. "We believe this kind of shopping experience will not be easily replaced by e-merchants."