Mall operator Parkson Vietnam on Friday filed for bankruptcy in Ho Chi Minh City, ending its 18 years of operations with million-dollar losses.
It is not commercially feasible to continue Parkson Vietnam operations, the parent company Parkson Retail Asia said in a statement.
Parkson Vietnam has historically operated at a loss, and such losses have been compounded in recent years due to a challenging business environment caused by the pandemic, it said.
The Vietnam operations recorded a pre-tax loss of SGD2.3 million (US$1.72 million) last year against a pre-tax profit of SGD13.7 million in 2021.
Revenue plunged from SGD10.1 million in 2021 to SGD2.4 million last year.
The profit attained in 2021 was largely attributed to the closure of two stores and the exit from tenancies resulting in de-recognition of lease liabilities, and recognition of income from subleasing assets.
By the end of last year Parkson Vietnam had a capital deficiency of SGD30.16 million.
The lack of support from Parkson Vietnam’s landlord (such as the negligible rental rebate or rental reduction) during the Covid lockdown, when the operation of Parkson Vietnam’s stores was restricted, adversely impacted the company’s financials, the statement added.
Parkson Vietnam therefore has filed a bankruptcy application to the People’s Court of HCMC and is awaiting its approval.
The exact financial impact of the bankruptcy will only be determined after the application is approved.
Parkson Retail Asia will continue to focus its operations in Malaysia where it is optimistic about its prospects.
It currently has 38 stores in Malaysia and only one in HCMC.
Parkson entered Vietnam in 2005 and developed several large malls in HCMC, Hanoi and Hai Phong. At its peak the company operated 10 malls across the country.
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