The Group has successfully established the" "service logo as one of the most recognized brands and the" "service logo has been recognized as a "Famous Trademark of Jiangsu province" by the Jiangsu Administration for Industry and Commerce since August 2002.

The department stores are located at prime shopping district in their respective cities, thereby attracting a steady flow of relatively high-end customers.

As at 31 December 2013, the proportion of self-owned properties is approximately 59.5%.This emphasis on ownership enables the Group to largely avoid the adverse effects of future rental escalation and lays a solid foundation for cost control and operational stability. To seize the development opportunity, the Group also manages to secure rights to use quality properties through long-term leasing, which reduces the impact of rental increment on the operation of department stores. The target term of lease is above 10 years.

Through the provision of interactive customer services, among others, “VIP Value-added Exclusive Services", the" Three Commitments" and the" Convenience and Repair Services" and continuous improvements in the quantity and quality of services, the Group has secured a group of loyal customers which lays a good foundation for development in the long run. As at 31 Decembe 2013, VIP member spending accounted for about 56.2% of the Gross Sales Proceeds of the Group.

The Group has achieved ISO9001 quality management system. The Group has successfully developed the ERP system for the centralized management of chain stores. The Directors are of the opinion that the ERP system is also capable of providing management with important operational, financial and human resources data in a timely fashion. The Directors are of the opinion that the systems currently in place have enabled the Group to formulate its development strategy in response to ever changing market conditions and to effectively monitor the operating status of the Group's department stores. Members of the Group share the same corporate culture and vision, and manage each of the department stores with a shared professional and systematic management methodology and operating approach.

With regard to enhancing competitiveness, the Group is fully aware of the importance of continued expansion of its operating scale and market share through chain store development. At present, the Group is operating 26 chain department stores that, the Directors believe, have achieved economies of scale. This helps to reduce the Group's fixed costs.

The Group has above 18 years of experience in planning and management of department store buildings and has developed a management model in respect of location selection and decoration of department stores, as well as property management. These enable the Group to provide a convenient and unique shopping environment and enhance the operating efficiency of each of the department stores.