Fitch lowers Parkson Retail

Fitch Ratings said it downgraded Parkson Retail Group's long-term issuer default rating and senior unsecured rating to BB+ from BBB-.

The outlook is stable.

The downgrade reflects Parkson's weaker sales growth and profitability, which will likely pressure credit metrics over the next two to three years, Fitch said.

A slower-than-expected economic recovery and the company's mature store network, which leaves it more exposed to competition, continued to affect Parkson's performance well into 2013, the agency said.

As a result, the company's first half of 2013 same-store sales declined 0.7% from the second half of 2012 despite a one-off boost in gold jewelry sales in the second quarter, spurred by lower gold prices, Fitch said.

The ratings continue to be supported by the company's well-established and geographically diversified presence in China across 36 cities, the agency said.

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