Cash Box KTV shutters Taipei outlet

Cash Box KTV (錢櫃), the nation's largest karaoke chain in terms of sales, has shut down one large outlet in Taipei and said it plans to close another in Kaohsiung soon.

The closures will cut the number of Cash Box KTV stores to 17.

The company opened its outlet on Chunghua Road in Taipei City near the Ximen MRT Station eight years ago. The facility's 110 rooms took in average monthly sales of NT$24 million (US$726,850) last year, accounting for 8.5 percent of the firm's total revenues.

"The reason we closed it down was because the rental contract expired early this month. Its closure won't have an impact on our performance as more than half of its customers have transferred to our new outlet across the street," company spokesman Eric Leu (呂嘉正) said in a phone interview yesterday.

Cash Box believes its new Chunghua Road store, which has nearly 180 rooms, can support demand in Taipei City's bustling Ximending area, Leu said.

Cash Box is scheduled to shut down a 110-room store in Kaohsiung that pulled in monthly sales of NT$15 million on average last year as its lease will end on Aug. 31, he said.

The company operates a new outlet nearby, but its 58 rooms only generated revenues of NT$3.5 million per month last year.

Although the new KTV is smaller, Leu said the firm was now increasing the size of its party rooms.

"Kaohsiung has seen a supply glut and we're taking steps to adjust the number of rooms in each area to better meet market demands," Leu said.

Cash Box saw its annual sales drop to NT$3.39 billion last year after reaching a high of NT$3.97 billion in 2005.

To maintain its position in the market, the firm plans to upgrade its 17 stores and may seek new locations in central and southern Taiwan when opportunities arise, Leu said.

Close KTV rival Holiday Entertainment Co (好樂迪娛樂事業) has also taken a conservative approach to expanding after recording its first loss last year.

Holiday's outlets reported a loss of NT$150 million on revenues of NT$3.09 billion last year, company spokesman Lee Chun-te (李俊德) said.

"Our major policy for now is to overhaul the existing stores. We will wait until next year to start opening new stores," he said.

Despite slow market in Taiwan, both companies are aggressive across the Taiwan Strait.

Holiday yesterday it will pump US$1.69 million into opening a new outlet in Shanghai in a 40-60 joint venture with Cash Box, Holiday said in a filing to the Taiwan Stock Exchange.

By end of the year, the companies plan to operate a total of 17 stores in China, up from the original 13, Lee said.

Shares Holiday remained unchanged at NT$18.9 on the local bourse yesterday.