Fitch lowers Parkson Retail

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

The outlook is negative.

The downgrades reflect the deterioration in Parkson's credit metrics for the medium-term, arising from weaker sales growth and profitability amid a challenging operating environment, Fitch said.

The downgrades also consider the company's second half of 2013 earnings, which continued to suffer due to the weak retail sentiment, austerity drive by the Chinese government and stiff competition from peers, as well as other retail formats, the agency said.

The negative outlook considers the continued pressure over the next 12 to 24 months on Parkson's performance from the still-weak retail sentiment in China and start-up losses for its existing and upcoming new stores, the agency said.

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