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Golden Eagle flies in cash,seeks M&A

The mainland's leading retail chain Golden Eagle Retail Group will invest 300 million yuan (US$37.5 million)on mergers and acquisitions(M&A)to fuel its growth in the next two years.
The Nanjing-based group that has 800 million yuan (US$100 million)in cash said it would not have to sweat it out in its M&A bids and the projected 25-30 per cent sales growth,as predicted by investment banks earlier.
The robust performance of the "stylish premium seller" during the first five months of this year,highlighted by a 44per cent jump in sales during the Golden Week May Day holiday,has moved Golden Eagle close to its annual target,company chairman Roger Wong said yestoday.
"We have already seen a very successful sales performance during the first five months of 2006,and the company recorded a jump of 22 per cent during the seven-day May Day holiday.We are so far very close to our target of 25 to 30 per cent growth in sales this year,"Wong said.
The credit for the jump also goes to their new outlet in Xi'an, Central China's Shanxi Province,which has delighted a huge number of customers since it opened on April 18.
The mid-to high-end department store operator,which sells global brands such as Polo Ralph Lauren,Hugo Boss and Cartier,will open a new 40000-squar-metre outlet in Taizhou in East China's Jiansu Province by the end of this year.Another department store is scheduled to start operation in its base city and Jiansu's capital,Nanjing,early next year.
The retailer's trading share surged by 19 per cent at its US$182-million Hong Kong listing debut,thanks to investor enthusiasm in the country's sizzling consumer market.
Its IPO,arranged by ABNAMRO Rothschild and Goldbond Capital,was 307 times oversubscribed by retail investors in Hong Kong,and pushed the price to the top end of eapectations.
With the mainland' domestic demand soaring and a growing number of retailers eyeing the market with great hopes,competitions among consumer product sellers could only get fiercer.
A division manager of one of the mailand's top ten department stores said retailers from home and abroad alike were brewing up ideas to increase their market shares as fast as possible because once the mass expansion of department stores and shopping malls outpace increasing domestic income and soaring demand,retailers would be left ruing the missed chances.
Beijing-based Wumart,a hypermarket and supermarket operator ,which depends on rapid store expansion and acpuisition of smaller rivals to sustain its growth,has brought stakes in home rivals to expand its presence and business on the mailland.
Also,it has vowed to contiune its expansion programme and add new shops to the existing 468 in the capital.
Home electronic appliance retailers Gome and China Paradise both announced their expansion plans at meetings to announce their companies' result.The mainland,crowded as it is with global retail giants,has attracted US-based Walmart and Germany's Metro, too,in their bid to get a share of the consumer pie.

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