China Nepstar makes management change, profit drops

Shenzhen, China China Nepstar Chain Drugstore said Monday that its co-CEO Jiannong Qian resigned, effective Aug. 20.

His resignation coincided with the expiration of his employment agreement with the company.

Ian Wade, China Nepstar’s co-CEO since Jan. 5, became CEO.

In financial news, China Nepstar reported second-quarter results on Monday. For the quarter ended June 30, the company reported revenue of US$78 million, which represented a 7.5% increase compared with the year-ago period. Net income was US$4 million, down from approximately US$8 million a year ago.

Same-store sales for second quarter 2009 decreased by 1.3%, from the same period in 2008.

"We remain focused on balancing revenue growth and margin improvement as this is our theme of this rather challenging year 2009," commented Wade. "Our efforts to adjust product mix and pricing to reflect the changing needs of customers in this environment have enabled us to minimize adverse effects on overall store performance."

China Nepstar is China's largest retail drug store chain based on the number of directly operated stores. As of June 30, the company operated 2,312 stores across 64 cities.

In July, Nepstar entered into a definitive agreement with Beijing Run Ze Tang Drugstore, to acquire its five drug stores in Beijing. This acquisition represents Nepstar's first retail presence in Beijing.