Aeon, a major Japanese retailer, and Nhat Nam Trade Company - owner of the Fivimart supermarket chain, have agreed on the transfer of the Fivimart chain to a domestic company on September 27, ending the four-year partnership between the two, Tri Thu Tre reported.
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Detail of the transaction was not disclosed.
On the same day, Fivimart announced the change of its brand identify. Starting September 28, Fivimart will no longer use Aeon logo beside its own logo in public.
Rumor about the "divorce" between Fivimart and Aeon started on the market in early September, which reportedly was due to inefficient cooperation.
Since the begin of the partnership in 2015, Fivimart increased its supermarkets from 10 to 23 in 2017, while revenue jumped from VND1.07 trillion (US$45.64 million) during the 2015 - 2017 period.
However, Fivimart posted a loss of VND60 billion (US$2.56 million) in 2015, which later widened to VND96 billion (US$4.09 million) a year later. In 2017, the local supermarket chain reported a loss of VND23 billion (US$981,318), resulting in an accumulated loss of VND197 billion (US$8.4 million).
The cooperation with Aeon was supposed to boost efficiency in Fivimart's corporate governance, promoting brand and expanding the network, which in reality did not go according to plan.
Fivimart's cost of goods sold in the 2016 - 2017 period was over VND1 trillion (US$42.68 million), equivalent to 80% of total revenue, according to the company's financial statement.
Moreover, administrative and financial expenses remain at a high level, reaching VND272 billion (US$11.6 million) and VND11.8 billion (US$503,612), respectively.
After ending its cooperation with Fivimart, Aeon still maintains the business partnership with Citimart, of which the Japanese retailer acquired a 49% stake in 2015. However, Citimart also reported a loss of VND91 billion (US$3.88 million) in 2015 and VND33 billion (US$1.4 million) in 2016, resulting in an accumulated loss of VND157 billion (US$6.7 million) at the end of 2016.
Aeon considered Vietnam's retail market has huge growth potential and plans to establish 20 large-scale shopping malls in the country by 2020. In addition to the existing four shopping malls, Aeon will shortly launch the other two in Hai Phong city and Ha Dong district (Hanoi).
