Chinese department store operator Parkson Retail Group announced last week that it will buy the two stores it manages in Kunming for 315.6 million yuan or US$40 million.

Parkson, owned by Malaysia-based Lion Diversified Holding, operates 39 department stores in 26 mainland cities. The company said that the purchase of the Kunming stores from businessman Kok Lam will facilitate its expansion plans. Both Kunming stores are located in the city's center, in the Brilliant Plaza and New Southwest Plaza developments.

Expansion plans aside, there may be other reasons behind the purchase. The two Kunming Parkson stores don't offer the same quality or variety as China's other Parkson outlets - especially in their supermarkets. If the stores can reach the merchandise and service quality of Parkson stores in Shanghai, they will have much greater success competing with Carrefour and Wal-Mart for market share in Kunming.

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