DAQING, China, July 14 /PRNewswire-Asia/ -- QKL Stores Inc. (the “Company”) (OTC Bulletin Board: QKLS), the leading regional supermarket chain in Northeast China, today announced an update to its supermarket retail expansion strategy.
The Company has opened three new supermarkets totaling 16,000 sq. meters in the Heilongjiang province since the start of 2009. The most recent store opened on May 27, 2009 in Zhaodong city, located approximately 115 kilometers from the Company’s headquarters in Daqing. The new store occupies approximately 6,049 sq. meters. This new store is QKL’s second store in Zhaodong city. The company also opened up two supermarkets in April 2009--a 5,000 sq. meter supermarket in Lindian, Heilongjiang Province and a 3,700 sq. meter store in the Xinguangtiandi commercial shopping center in Daqing.
The Company also announced that it has signed contracts to open eight new supermarkets and one department store totaling 77,000 sq. meters as well as a 19,600 sq. meter distribution center, all of which are scheduled to open by the end of 2009 or at the beginning of 2010. The Chinese cities and districts in which these supermarkets will be located include Tongjiang, Zhaozhou, Hailun, Zhalaiteqi, NongAn, Datong, Mudanjiang, Xizhai and Donghu. With the exception of the NongAn store (Jilin Province) and the Zhalaiteqi store (Inner Mongolia), all of these new stores will be located in the Heilongjiang Province. The average size of each new supermarket is expected to be approximately 5,500 sq. meters. The store in Mudanjiang will open as a department store with a supermarket in the basement and have an expected total area of 33,000 sq. meters.
To support its retail expansion efforts, the Company plans to open a new distribution center in Harbin, the capital of the Heilongjiang Province. This new distribution center, which is the company’s second facility, will house the majority of its grocery, general merchandise and non-food items. Management believes this new facility is sufficient to support current stores in the region as well as future stores the Company plans on opening over the next several years. This new facility is expected to be operational in the fourth quarter 2009.
“Our opening of three new stores thus far in 2009 along with the planned opening of nine additional stores and a distribution center reflects our overall optimism about our retail store business,” said Mr. Zhuangyi Wang, Chairman and Chief Executive Officer of QKL Stores. “We expect to fund these new stores through a combination of internal cash generation and short-term bank loans. We currently have 32 stores that are fully operational, comprised of 30 supermarkets and 2 department stores. Together with our newly planned stores announced today, we are taking the right steps to position our business for strong operational and financial performance. We have a highly compelling opportunity in northeast China and Inner Mongolia in which to expand and believe that there are approximately 200 third and fourth tier cities that could benefit from our supermarkets, which offer the broadest product selection available to consumers in these regions. We are pleased that we’ll have a larger distribution center in the near future which will help facilitate our retail expansion strategy. QKL Stores has a talented and deep management team to execute our growth strategy and we continue on our path to becoming the leading retail supermarket chain in Northeast China.”
About QKL Stores Inc.:
Based in Daqing, China, QKL Stores Inc. is a leading regional supermarket chain company operating in Northeast China. QKL Stores sells a broad selection of merchandise, including groceries, fresh food, and non-food items, through its retail supermarkets, convenience stores, and department store; the company also has its own distribution centers that service its supermarkets. For more information, please access the Company’s website at: http://www.qklstoresinc.com .
Safe Harbor Statement
Certain statements in this release and other written or oral statements made by or on behalf of the Company are “forward looking statements” within the meaning of the federal securities laws. Statements regarding future events and developments and our future performance, as well as management’s expectations, beliefs, plans, estimates or projections relating to the future, are forward-looking statements within the meaning of these laws. The forward looking statements are subject to a number of risks and uncertainties including market acceptance of the Company’s services and projects and the Company’s continued access to capital and other risks and uncertainties. The actual results the Company achieves may differ materially from those contemplated by any forward-looking statements due to such risks and uncertainties. These statements are based on our current expectations and speak only as of the date of such statements.
