After nearly 20 years of operation in Vietnam, Parkson Vietnam, a wholly-owned subsidiary of Parkson Retail Asia, has announced that it will file for voluntary bankruptcy with the City People’s Court in Ho Chi Minh City on April 28, 2023.
The decision was made due to the company’s long history of loss-making operations, lack of support from landlords during the COVID-19 pandemic, and negative impact on the company’s financial position. The parent company, Parkson Retail Asia, stated that continuing to operate in Vietnam is not commercially viable and that filing for bankruptcy is the optimal option.
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Parkson Vietnam once had 10 shopping centers across the country and was considered the standard of luxury in Vietnam. However, the company’s string of loss-making operations and lack of support from landlords during the COVID-19 pandemic led to its financial difficulties. As of the third quarter of 2018, Parkson Vietnam lost 48 billion dong and had seven consecutive quarters of losses.
The bankruptcy proceedings must be approved by relevant authorities in Vietnam, and the impact on the financial situation of the parent company can only be accurately determined after the proceedings have been granted.
Parkson Vietnam is fully responsible for the bankruptcy according to Vietnamese law, and the maximum risk of the Parkson Retail Asia Group lies only in the capital contribution to Parkson Vietnam. In the audited financial statements, Parkson Retail Asia recorded a loss due to its capital contribution to Parkson Vietnam.
Parkson Retail Asia will focus on operations in Malaysia and reassess its business strategy.