The Chinese appliance giant Suning Appliance Co. said Thursday it will be able to turn the troubled Japanese electronics chain LAOX profitable after it became the biggest shareholder.
"One important reason we decided to buy into LAOX is that we found we can play an important part in turning LAOX profitable," said Sun Weimin, Suning's president at a press conference in Tokyo.
Suning will invest 800 million yen (US$8.4 million) to buy 66.67 million, or 27.36 percent of LAOX shares, at 12 yen per share, becoming its largest shareholder. Suning will also appoint two representatives to LAOX's board.
The deal has yet to be finalized at LAOX's board.
"To make LAOX profitable, we will purchase more Japanese products through the network of LAOX, to encourage more consumption of Chinese tourists in LAOX in Japan, and to set up after-sales services centers for Japanese products in China," Sun said.
He added Suning will also try to streamline LAOX's shop structure, re-examine their locations so as to make full use of the resources.
Suning, headquartered in eastern China's Nanjing City, Jiangsu Province, is China's second-largest home appliance chain. It runs 800 stores in Beijing, Shanghai and other cities.
LAOX, founded in 1930, has 10 stores selling appliances, computers, telecommunications products, animated games, toy models and musical instruments. It fell into the red since fiscal year 2001, and through the financial year ending March 31 it made a net loss of 12.6 billion yen.
(Xinhua News Agency June 26, 2009)
