Fnac outlets about to proliferate

Consumers can expect to see Fnac outlets inside four Shin Kong Mitsukoshi Department Stores (新光三越) nationwide by the end of the year. The move is part of a joint venture inked between the two companies yesterday in Taipei.

"Shin Kong Mitsukoshi controls a 60 percent share in the new venture -- Fayague Co (法雅客) -- while Fnac holds the remaining 40 percent," said Wu Tung-hsing (吳東興), chairman of both Fayague and Shin Kong Mitsukoshi Department Stores.

Shin Kong Mitsukoshi and Fnac have together raised NT$500 million to fund the expansion plan, Wei Tai-lo (魏岱洛), a Shin Kong manager said.

The first two Fnac shops are scheduled to open in Shin Kong Mitsukoshi's Hsinyi district and Nanking West road outlets before the end of April. The remaining two Fnac outlets will open in Taichung and Tainan by the end of the year, with two more in the planning stage.

"There will be around six Fnac stores located inside Shin Kong Mitsukoshi Department Stores next year," Wu said.

Shin Kong Mitsukoshi reported sales of NT$40.6 billion last year from its 10 department stores nationwide.

Fnac is already operating in Taipei's Asiaworld complex and near the Taipei Railway Station.

Fnac entered the local market in July 1999 and has remained in the red because of a lack of local marketing prowess.

"It's not easy to export a retailing concept ... the Taiwan market is quite different from Europe," said Jean-Paul Giraud, chairman of Fnac.

Fnac needs a local partner to offer localized services and products, he said.

Fnac is one of the largest retailers of electronics, books, CDs and videos in Europe. It opened its first store in France in 1957 and it now has 87 outlets in eight countries.

Taiwan is Fnac's first foothold in Asia.

Joining forces with Shin Kong Mitsukoshi, Fnac Taiwan will be able to open new stores in prime locations, creating an improved economy of scale, Giraud said.

"We hope that by the end of next year, we will be able to break even in Taiwan," he said.

Shin Kong expects to create synergy from the collaboration.

"Setting up Fnac outlets in our stores will help to broaden our customer base," said Steven Wu (吳昕達), executive vice president of Shin Kong Mitsukoshi.

With most department stores attracting largely female clientele, Wu hopes Fnac will attract more male customers into stores, he said. Fnac's brand recognition and strong customer loyalty may also help to differentiate Shin Kong Mitsukoshi from other department stores, Wu said.