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23 Feb

NWDS Enters Mianyang City of Sichuan Province and Acquires Chongqing Store to Expand its Competitive Edge in Southwestern China

And Announces Acquisition of Beijing Trendy Store to Self-owned

New World Department Store China Limited ("NWDS" or the "Company"; Hong Kong stock code: 825), one of the largest owners and operators of department stores in the PRC, is pleased to announce that the Company will enter Mianyang city of Sichuan Province by opening new store in order to strengthen the development edge in Southwestern China. The Company also agreed to acquire the operating rights of Chongqing New World Department Store ("Chongqing Store") and Beijing New World Trendy Department Store ("Beijing Trendy Store"), each at a consideration of RMB 5 million in January to further increase the number of self-owned stores. The applications for acquisition of two stores are in progress.

The Company entered the Southwestern China Region in 2004, since then, we anticipant good prospect in the business development within the Region. Besides, the government keeps playing an active role in promoting urban construction and tourism in Southwestern China Region, which has been proven to be fruitful. With a steady increase of local people's income, together with more inbound residents and travelers, the retail industry in Southwestern China Region grows subsequently. Hence, the Company reinforces the development of Southwestern China Region in recent years. Apart from acquisition of Kunming New World Department Store ("Kunming Store") and Chengdu New World Department Store ("Chengdu Store") in 2009 and last year respectively, the Company agreed to acquire the operating right of Chongqing Store in January this year. Moreover, the Company launched Mianyang project to extend its business from Chengdu to Mianyang in line with the expansion strategy of "Radiation City", indicating the Company's confidence to the development of Southwestern China Region.

The three stores in the region, comprising Chengdu Store, Kunming Store and Chongqing Store, all make clear plans for business optimization and merchandise integration to cater for different needs from targeted customers. The stores also carry out a series of flexible promotional campaigns to strengthen their influence among the market and awareness of customers. Located in Mianyang, the new self-owned store is expected to commence operation in 2012 with a GFA of about 35,000 square metres. The Company will have four self-owned stores in Southwestern China Region coupled with Chongqing Store and Mianyang project by that time.

Opened in September 2006, Chongqing Store with a GFA of about 42,000 square metres, is located in the Central of Guanyinqiao Walking Street, the stronghold of Guanyinqiao business circle in Jiangbei district of Chongqing. The district is another important business circle of Chongqing with well-developed facilities, convenient transport and high shopper traffic, possessing a favourable geographic location. By accelerating the establishment of unique operating mode in recent years, Chongqing Store endeavors to be a trendy department store with environment combining fashion, diverse styles, different operational traits and various interesting themes. Therefore, Chongqing Store boldly made the decision of enovating the top floor into a brand new catering section, differentiating itself from competitors. Moreover, grabbing the opportunity of relatively weak competition on ladies' shoes category among the competitors, ladies' shoes area of Chongqing Store was enlarged and famous brands were introduced accordingly, establishing the status of the biggest ladies' shoes trading center in the district as well as spotlighting in Chongqing with a catchphrase popular among locals: "Buy Shoes? Go to New World!". Chongqing Store has set up two pillar edges in the district: ladies' shoes and food delicacies under the integration and optimization of merchandises last year. Together with all kinds of effective promotions and VIP Club activities, customers' recognition towards Chongqing Store has been effectively raised.

To expand the retail network in Southwestern China Region, the Company actively develops Mianyang project, the new project in Southwestern China Region. Located in the northwestern part of Sichuan Province, Mianyang is 90 kilometres away from Chengdu with 5.4 million of population in total. Mianyang enjoys convenient transportation with well-developed airport, railways and highways. Travel time from Chengdu to Mianyang will be greatly shortened to 30 minutes after the completion of Chengmianle high-speed railway by the end of this year. Possessing excellent geographic location, the five-storey Mianyang project is located in the Eastern Linyuan, where is not only the centre of Mianyang, but also the new business hub developed by Mianyang government with high traffic and efficient transportation facilities. Themed as "Living Gallery", Mianyang project will house an array of young fashion brands targeting youth market, including cosmetics, ladies' wear, casual wear and sportswear, etc.. In addition, the new store will offer a variety of goods for customers' selection, such as electrical appliance, gold & jewellery and household items coupled with complementary services like diversified food & beverage and spa center, catering the needs of different family members in order to become the most influential one-stop shopping department store in Mianyang.

Apart from expanding the business of Southwestern China Region, the Company also seizes the opportunity to accelerate the pace of acquisition of managed stores. We have not only acquired the operating rights of Shanghai-Hong Kong New World Department Store-Pujian Branch Store, Beijing New World Department store and Chengdu Store in 2010, but also acquired the operating right of Changsha New World Trendy Plaza and agreed to acquire the operating rights of Chongqing Store and Beijing Trendy store in January this year to increase the number of self-owned stores.

As the second department store in Beijing of NWDS, Beijing Trendy Store was opened in March 2007 with GFA of approximately 31,200 square metres. The store is ideally located in the central business district of Chaoyang District, Beijing, merely 500 meters away from the East of Guomao Qiao and in the north part of East Changan Street. Located in the recent rapid development commercial and financial centre of Beijing, Beijing Trendy Store is easily accessible by subway line 1, line 10 and over 10 public transportation lines. Themed as "Trendy", Beijing Trendy Store is a "Fashion Gallery" emphasizing "Mix & Match". NWDS operates two Fashion Galleries in Beijing coupled with Beijing Shishang New World Department Store, striving to be the trendy landmark in the city. In addition, 3 living galleries have been opened in Beijing of NWDS to facilitate the needs of the families, namely Beijing New World Department Store, Beijing Liying New World Department Store and Beijing Qianzi New World Department Store. It lays a solid foundation for the leadership of NWDS in Beijing with business covering Chongwen, Chaoyang and Shunyi districts.

Mr. Cheung Fai Yet, Managing Director and Executive Director of NWDS, said, "The Company is optimistic about the development of Southwestern China Region and has been actively expanding the business there since last year. According to ‘The Twelfth Five-year Plan for Economic and Social Development of Chongqing City' published in January this year, the anticipated GDP of Chongqing in 2011 is ranked the first in the country by increasing 13.5%. Chongqing will zealously explore the consumption potential of rural area to enhance the consumption capability. Therefore, the Company is optimistic about the consumer market in Chongqing and greed to acquire Chongqing Store. On the other hand, we are expected to open a brand new store in Mianyang in 2012 in order to seize opportunity of the completion of Chengmianle high-speed railway by the end of this year, tying in with the expansion strategy of ‘Radiation City' by extending the business to Mianyang market from Chengdu, where the Company has already consolidated its presence. In addition, the Company has been actively acquiring the managed stores with fortunate business potential in recent years. We have acquired the operating rights of 6 managed stores in about a year, reflecting the confidence of the Company towards the prospect of department store industry as well as striving to become the leading department store operator in the PRC."