Core Viewpoint - AEON (永旺) has renewed its lease for the Tianhe City store in Guangzhou, committing over 100 million RMB for an 8-year term, while also planning a significant upgrade to enhance customer experience and adapt to market demands [2][11]. Group 1: Lease Agreement and Financials - AEON Guangdong has signed a lease agreement with Tianhe City Group for a total rent of approximately 101.6 million RMB over 8 years, starting from July 1, 2025 [2]. - The average annual rent in the new agreement is about 12.7 million RMB, a significant decrease from the previous annual rent which increased from 37.2 million RMB to 52 million RMB over 15 years [5][11]. - AEON has been facing continuous losses in the mainland market for 8 years, prompting a need for strategic changes [7]. Group 2: Store Transformation and Market Strategy - The Tianhe City store will be transformed into an AEON STYLE SM flagship store, focusing on the needs of young middle-class families for health, convenience, and quality [2][11]. - AEON's strategy includes downsizing and optimizing store space to reduce rental and management costs, moving away from a "scale worship" approach [7][11]. - The company plans to open 8 new stores in Guangdong this year, increasing its presence in the region despite previous closures in other cities [11]. Group 3: Industry Context and Challenges - The retail market in China is becoming increasingly competitive, with the rise of e-commerce and new retail formats like community group buying impacting traditional supermarkets [7][12]. - AEON's challenges reflect broader issues in the retail sector, where many companies are struggling with high operational costs and changing consumer preferences [7][12]. - The Tianhe City area is undergoing a three-year transformation to adapt to new consumer trends, indicating a shift in retail strategies across the industry [12].