Hanoi project cancelled, Japanese retailer Aeon incurs $7.4 mln loss

Japan’s Aeon recorded an “impairment loss” of JPY1,104 million ($7.4 million) due to the cancellation of its Hoang Mai property development in Hanoi, the retail giant said in its quarterly performance review.

The project was the third Aeon Mall planned in Hanoi, covering 8.03 hectares in Hoang Mai district. Hanoi authorities had approved the draft plan for the project in February 2023, but little progress was made.

Aeon's report mentioned no further detail about the cancellation.

Besides, in its March-August 2024 (first half of fiscal year 2024) review, Aeon said it made an operating income of JPY2,414 million ($16.2 million) in Vietnam, up 21.2% year-on-year, on operating revenues of JPY8,192 million ($54.9 million), up 14.5%.

These figures made Vietnam Aeon’s third-biggest market in the world and the largest one in Southeast Asia. Vietnam's figures were only lower than those in home market Japan and China, its biggest overseas market.

Aeon attributed the strong performance in Vietnam to continued success of specialty store sales in existing malls.

The Japanese giant also pointed out challenges, including negative impacts on consumption due to problems in factory worker employment, delays in wage improvements and other labor environment issues.

Aeon said its promotion programs had partly contributed to steady sales.

To date, there are seven Aeon outlets in Vietnam: two each in Hanoi and Ho Chi Minh City; and one each in the southern province of Binh Duong, the northern city of Hai Phong and the central province of Thua Thien Hue. Of these, the latest to open is in Thua Thien Hue.