Suning Appliance, the mainland's second-biggest home appliance retailer, said rising rental costs meant it would expand its store network by buying rather than leasing key sites around the country.
The firm, which yesterday reported a better than expected 93.42 per cent increase in earnings last year, said it would buy properties at core business districts in big cities and aimed to open 200 stores this year.
'Rising rental costs are still the key challenge for the chain's development,' Suning told the Shenzhen Stock Exchange yesterday. 'We will strengthen co-operation with developers and buy properties to reduce risk.'
The Nanjing-based company gave up the chance to buy rival Dazhong Electrical Appliances last year, leaving that purchase to bigger competitor Gome Electrical Appliances Holding. Instead, it embarked on its own expansion plans.
By the end of December, it had 632 outlets around the nation, including 175 that opened last year. The company last year opened six self-owned stores, including two flagship stores in Shanghai and Wuhan.
To better control the chain's development, Suning terminated 19 franchised stores and said it would focus more on self-managed ones.