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Uni-President and Hankyu team up on department stores

As department stores report declining sales due to the high level of consumer bad loans, Uni-President Group (統一集團) is bucking the trend in announcing yesterday a venture with Japan's leading retail group to explore the market.

Its first project with Hankyu Department Stores Inc, which runs 11 stores in Japan, will be the 6,000 ping (19,800m2) retail area inside the Dream Mall (夢時代購物中心) in Kaohsiung.

"This is the first time Hankyu has tapped into international markets outside Japan. We do not rule out extending bilateral cooperation north to other areas of Taiwan, such as Taipei, and even entering China together," said Jason Lin (林蒼生), chief executive officer of Uni-President Group, at a press conference in Taipei yesterday.

Before the partnership took shape early this month, Uni-President Group formed Uni-President Department Stores Corp (統一百華) with initial capital of NT$500 million (US$15.4 million).

The new entity is 30 percent-owned by Uni-President Enterprises Corp (統一企業), the nation's largest food conglomerate. The remainder is controlled by President Chain Store Corp (統一超商), owner of the 7-Eleven franchise.

Although some question the time that Uni-President is choosing to enter the competitive market, Lin said that he was optimistic about the strong purchasing power of women aged between 24 and 32, the firm's target customers.

Shinya Yamanaka, general manager of the planning and development department at Hankyu Department Stores, said at least 10 new brands of women's clothes would be introduced from Japan to showcase latest fashion trends and carve out a market segment.

The new department store is scheduled to open in the second quarter of next year, while the Dream Mall is expected to launch at the end of this year.

Mara Wang (王香完), head of retail services at Jones Lang LaSalle Taiwan, was upbeat on Uni-President Group's move, considering its partner's strong performance in Japan's Kansai region.

"As long as they respect professionalism, they stand a chance of delivering success," she said in a telephone interview.

Rival Shin Kong Mitsukoshi Department Store (新光三越) said there remained great potential in the Kaohsiung retail market, which is still in the development stage and requires more giveaway activities to boost sales.
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