Fitch lowers Parkson Retail

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

The ratings have been removed from Rating Watch negative, the agency said.

Fitch also said it assigned a negative outlook to the ratings and a recovery rating of RR4 to the senior unsecured rating.

The downgrade reflects the continued deterioration in Parkson’s core business and its rising leverage despite the cancellation of the proposed Parkson Retail Asia Ltd. acquisition, the agency said.

The negative outlook reflects the uncertainty over when same-store sales will stabilize, Fitch said.

Parkson’s fundamentals have steadily deteriorated over the past three years due to weaker consumer spending and competition from other retail formats, such as e-commerce and shopping malls, the agency said.

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