What: The Malaysian department company Parkson is facing financial difficulties in many countries where it operates.

Why it is important: While Vietnam is deemed as a strategic market for Central, Parkson is exiting it and files for bankruptcy. The article depicts an incorrect view regarding the state of department stores, as it seems that Parkson’s situation is more due to mismanagement than to a general context supposedly applying to all department stores in the world.

Parkson Holdings Bhd, a retail giant, is a significant casualty of this changing retail landscape, having filed for bankruptcy in Vietnam and dealing with ongoing debt issues at home. Its financial difficulties started before the Covid-19 pandemic, with losses for the financial year ending in December 2022 at RM119 million.

An early entrant in the Malaysian retail market, Parkson has downsized from 102 stores to around 80 since 2020, suffering significant losses due to decreased demand for premium items post-pandemic and the rise of e-commerce. While Parkson has ventured into e-commerce, there are concerns that this may negatively impact in-store sales. However, others believe that e-commerce could boost the growth of large retail chains by driving customers to brick-and-mortar stores.

Parkson faces difficulties in Vietnam and Malaysia