Far Eastern stakes claim in retailer rush

Competition among department stores in Taipei's busy Hsinyi District is getting keener, as Far Eastern Department Stores Ltd (遠東百貨) said yesterday that it is planning to build a new shopping mall in an area that is already thick with department stores.

Far Eastern yesterday signed a deal with the Taipei City Government to lease public land next to Shin Kong Mitsukoshi Department Store (新光三越) Hsinyi store.

The company said it plans to build a shopping mall on the 9,499m2 tract of land, which it will be allowed to use for 50 years.

On Sept. 16, the retailer won the bidding to lease the land for NT$3.196 billion and it is estimated that it will spend another NT$2 billion to build the shopping complex, said Tom Yeh (葉清水), spokesman for Far Eastern.

"We are targeting the younger generation and we hope to begin construction as soon as possible after obtaining the construction permit," Yeh said.

Far Eastern Department Stores is owned by the Far Eastern Group (遠東集團), which is now the largest department-store operator in Taiwan after acquiring a 43 percent stake in five Pacific Sogo Department Stores (太平洋崇光百貨) last October from the Pacific Construction Co (太平洋建設).

The group currently runs a total of 16 stores, and plans to set up another outlet in the soon-to-be-opened Taipei 101 Mall, also in Hsinyi District.

As Far Eastern expands its Sogo outlets, it also eager to get a foothold in the eastern side of the capital city with its own name. It hasn't had a Far Eastern department store in that part of the city for years, and in fact has only one store in Taipei -- in the Hsimenting area of west-end Taipei

"We believe the [Hsinyi] site is a perfect location for us to carry out the project," he said.

In addition to the the soon-to-be-opened Taipei 101 Mall, the area is already crowded with two Shin Kong Mitsukoshi department stores, a New York New York department store and the Neo 19 entertainment center.

Still, Far Eastern believes the project will be a moneymaker since the new store will lure more shoppers to the area. Yeh said.

Shauna Lee (李香萩), an assistant manager at the Shin Kong Mitsukoshi Department Store in Taipei, said the company had no comment on the matter. Mitsukoshi is going to open a third store in the area in January next year.

One market watcher said the project is viable.

"Although the move will stress the already competitive retail business in the area, it will also act as a clustering effect to attract more people in it," said Eric Lai (賴建承), an associate manager at Marbo Securities Consultant Co (萬寶證券).

But Far Eastern needs to create a new image and style to distinguish itself from its traditional and out-of-fashion image, Lai said.

Alex Wang (王立人), associate manager of research department at Taylor Nelson Sofres Plc in Taipei, a UK-based market information provider and consulting company, also said Far Eastern should cautiously choose the brand name, as well as the tone, of its new store.

"If the new outlet is just a copy of its Hsimenting store, it is doomed to fail," Wang warned.