Watsons eyes expansion

BackgroundWatsons is a cosmetics and personal care products retailer in Asia and Europe. The company directly operates over 1,600 stores, 500 of which are in mainland China, while a further 150 are in Hong Kong. Watsons is owned by AS Watson Group (ASW), a wholly owned subsidiary of Hutchison Whampoa (0013:HKG). ASW also owns European brands such as The Perfume Shop, Rossmann, Savers, Superdrug and Kruidvat. Operations in mainland China currently drive 15% of ASW's annual profits. ASW last publicly reported results in 2006 when it realised revenues of HK$99.1bn (Rmb 87.1bn, $12.8bn, €9.4bn, £8.5bn), accounting for 37% of the HK$267.7bn in turnover generated by its parent Hutchison that year. Profits were not disclosed. Watsons is now present in 80 of China's116 cities with populations over 1m and continues to expand into lower tiers.