Sogo tests water in Hsinyi retail district

Pacific Sogo Department Store (太平洋崇光百貨), one of the nation's largest department store chains, has decided to test the retail water in Taipei's Hsinyi District by setting up an outlet in the soon-to-be-opened Taipei 101 Mall, an executive of the company said yesterday.

Next Monday, Pacific Sogo is scheduled to sign a five-year lease with Taipei Financial Center Corp (台北金融大樓公司), owners of the Taipei 101 Mall.

"This will be the first move Sogo makes into Hsinyi District," said Lee Kuang-rong (李光榮), a vice president at Sogo.

The 700-ping (2,310m2) outlet will be located on the second level of the four-floor mall, featuring women's cosmetics, outfits and fashion accessories.

The mall is slated to formally open on Nov. 14.

Sogo expects to generate NT$500 million in annual sales from the new store, Lee said.

He added that rather than boosting income, the move aims to test the market.

Compared with the NT$16.5 billion sales Sogo generated last year, Lee regards the new store "as a touchstone."

The Hsinyi District attracts local and international business travelers, making it a desirable location for retailers, Lee said.

"It is the most internationalized district in Taiwan and we would like to be part of it," he said.

Additionally, Sogo is interested in expanding into more retail space in Hsinyi District in the future, but any plans have to obtain approval from Sogo's partner company, Far Eastern Group (遠東集團), Lee said.

In October of last year, Far Eastern Department Stores Ltd (遠東百貨) of the Far Eastern Group spent NT$1 billion to take over 43 percent of Pacific Sogo shares.

One retail market watcher said Sogo's new outlet is expected to benefit from its parent group.

"The Hsinyi District is a very attractive area and most retailers are trying their best to get in," said Phina Su (蘇麗妃), a senior manager for retail services at CB Richard Ellis Taiwan Ltd (世邦魏理仕).

The Far Eastern Group owns a several-thousand-ping site on Hsinyi District's Sungjen Road, which may be a suitable location to set up a new department store, she added.

There are already several major commercial hot-spots in the Hsinyi District, including two Mitsukoshi department stores (新光三越百貨), New York New York department store, Warner Village movie theater and the Neo 19 entertainment center.

Mitsukoshi is going to open a third store in the area in January next year, while President Takashimaya (統一高島屋百貨) is also slated to open a department store in March next year.

"Taking all these venues into consideration, the Hsinyi District contains more than 10,000 pings of retail floor space," Su said.

"However, the area's retail market still has plenty of room to grow," she added.

Shops in that area already offer a wide selection of products for teenagers, while choices for office workers or people living in the Hsinyi District's residential buildings are limited, she explained.

"Therefore, we think retailers featuring premium or brand-name products can profit," Su said.