Red Star Macalline issues a solemn statement: The contract termination with the subsidiary of Sunsea Parking is a normal one, and there is no "violent contract tearing".

On the evening of January 26, Red Star Macalline Home Furnishing Group issued a statement on its official WeChat public account stating that the expressions such as "Red Star Macalline violently breaches the contract", "Red Star Macalline stages a real-life version of the Farmer and the Snake", and "Red Star Macalline betrays the White Knight and violently tears up the contract" mentioned by some self-media accounts when describing the past cooperation between Red Star Macalline and Shanghai Hongjing are all untrue.

Recently, there have been continuous rumors about the store closures and contract disputes of Red Star Macalline. In terms of performance, on January 17, 2025, Red Star Macalline Home Furnishing Group Co., Ltd. released the 2024 annual performance forecast, estimating that the net profit loss attributable to the parent company's owners will reach 2.770 billion to 3.250 billion yuan, further expanding compared to the net loss of 2.57 billion yuan in the same period of the previous year. Red Star Macalline stated that, first, the fluctuations in the domestic economic situation and the continuous downturn in the real estate market have led to a significant contraction in the consumer demand in the home furnishing industry. As a home furnishing retail giant, the rental rate of Red Star Macalline's shopping malls has significantly decreased, resulting in a reduction in rental income.

The following is the original text of the statement:

In response to the untrue remarks about the past cooperation between Red Star Macalline and Sunshine Haitian Parking Industry Group (hereinafter referred to as "Sunshine Haitian") and its subsidiaries that have been circulating on the Internet recently, our company hereby solemnly declares as follows:

1. On January 28, 2022, we signed the "Parking Lot Lease/Revenue Right Transaction Agreement" with Beijing Hongjing Boxing Parking Management Co., Ltd., a subsidiary of Sunshine Haitian (hereinafter referred to as "Beijing Hongjing"). Later, Beijing Hongjing transferred the rights and obligations under the "Parking Lot Lease/Revenue Right Transaction Agreement" to Shanghai Hongjing Boxing Parking Management Co., Ltd., another subsidiary of Sunshine Haitian (hereinafter referred to as "Shanghai Hongjing"). That is, we agreed with Shanghai Hongjing to lease a total of 36 Red Star Macalline home furnishing mall parking lots located throughout the country to Shanghai Hongjing and its subsidiaries, and the two sides signed the corresponding 36 "Parking Lot Lease Contracts".

2. After the signing of the above contracts, in the actual cooperation process, the Shanghai Hongjing side committed a series of breaches of contract without the consent of the Red Star Macalline side, including gathering people in about 30 Red Star Macalline home furnishing malls for a long time, not handling customer complaints in a timely and proper manner, not responding to management demands in a timely manner, and not dealing with frequent failures of the parking lot equipment system in a timely manner, which seriously affected the normal operation of the Red Star Macalline home furnishing parking lots and malls. In order to ensure a high-quality shopping experience and safety guarantee for mall customers, and to protect our legitimate rights and interests from being violated, we have, in accordance with the contract, sent a notice of termination to Shanghai Hongjing and its subsidiaries on August 30, 2024, confirming the termination of all the above contracts. The procedure is legal and the process is compliant.

3. Based on this, the expressions such as "Red Star Macalline violently breaches the contract", "Red Star Macalline stages a real-life version of the Farmer and the Snake", and "Red Star Macalline betrays the White Knight and violently tears up the contract" mentioned by some self-media accounts when describing the past cooperation between Red Star Macalline and Shanghai Hongjing are all untrue.

4. If after the release of this statement, the relevant infringing subjects still spread untrue content that infringes on the reputation of Red Star Macalline, we will also reserve the right to take legal measures to safeguard our legitimate rights and interests.

Thank you for your attention and support! Let us jointly maintain a healthy and orderly business environment and public opinion environment.

Red Star Macalline Home Furnishing Group Co., Ltd.

January 26, 2025