Mon, Jul 30, 2007 - Page 12 News List

Idee in talks with buyers for ailing Taichung branch

By Jackie Lin  /  STAFF REPORTER

Idee Department Store (衣蝶百貨), an affiliate of the debt-ridden Rebar Asia Pacific Group (力霸亞太企業集團), is in talks with potential buyers for its money-losing Taichung branch, a company executive said yesterday.

"The company is now negotiating with some interested investors. It's likely that the branch will change hands," senior manager Sunny Liu (劉懿慧) said during a telephone interview yesterday.

She declined to disclose the names of the potential buyers, citing confidentiality.

The firm said on Saturday it was considering shutting down the Taichung store in October following a two-month big sale from Aug. 10 to Oct. 15.

troubled history

Opened in 2003, the Taichung unit never became profitable and its sales declined 20 percent in the first half of this year as the snowballing Rebar Group scandal weakened consumer confidence.

The branch reported sales last year of between NT$2 billion (US$61 million) and NT$2.2 billion.

vouchers are safe

Liu assured consumers that all the vouchers issued by the retailer remain valid.

Since the company already stopped printing new coupons early this year amid the Rebar Group's financial difficulties, the circulation should be small, she said.

Shoppers can also use these vouchers at other branches, Liu said.

Idee's five units nationwide -- with two stores in Taipei and one in Taoyuan, Taichung and Chiayi -- booked sales of NT$9.63 billion last year, a 10 percent drop from the previous year.

The company nevertheless managed to make a profit.

cash cow

Dubbed the Rebar Group's cash cow, Idee has seen relations with its suppliers sour as its capital flow encountered problems in November last year and in December 2005, triggering speculation that the department store could shut down or that management at some of its branches might be replaced.

In early January, approximately 80 percent of its suppliers formed a self-help organization to secure their rights and interests after Idee again failed to make payments on time.

Some of them even threatened to cut ties with the retailer but later agreed to support Idee when company president Wang Lin-mei (王令楣) promised to boost the frequency of payments from once a month to three times a month to facilitate supplier capital flow.

At that time, Wang also offered to reduce the company fee charged to suppliers by 2 percent during the following three months.

Suppliers are usually required to pay 20 percent to 25 percent of their business income to the department stores they work with.

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