Far Eastern Group (遠東集團), which operates Far Eastern Department Stores (遠東百貨) and Pacific Sogo Department Stores (太平洋崇光百貨) across the Taiwan Strait, is planning to open up to three department stores a year in second and third-tier cities in China.
The group has been searching for development opportunities in Wuhan (武漢), Far Eastern Group chairman Douglas Hsu (徐旭東) said.
“The pace of development in China’s second and third-tier cities is accelerating,” Hsu told a media briefing after holding a press conference to promote annual sales at its three Sogo stores in the east of Taipei.
After the Chinese Communist Party’s 18th Party Congress, Far Eastern will speed up its expansion into these emerging cities with the aim of opening two or three department stores a year, Hsu said.
However, Hsu said it would not be a good time for the group to deepen their business in some first-tier Chinese cities such as Beijing, at least for the near future.
The group is also looking to purchase plots of land in China for the development of hotels or for other uses, Hsu added.
Currently, the group operates seven Sogo stores and four Far Eastern stores in China.
The group also owns eight Sogo stores in Taiwan that are expected to generate revenue of NT$8.74 billion (US$300 million) during this year’s year-end annual sales, up about 4 percent from a year earlier.
Hsu said sales at the three Sogo stores in Taipei — the Zhongxiao (忠孝), Fuxing (復興) and Dunhua (敦化) branches — have shown year-on-year growth of 2 percent since the annual sales period was launched on Thursday last week.
“That sounds quite satisfying to me,” Hsu said.
Based on prior experience, the revenue generated by the discount period usually accounts for more than 20 percent of full-year sales, which indicated that Sogo store sales may still reach the target of NT$42.5 billion set early this year.
Hsu said customer flow remained strong during the first week of annual sales, but that some customers maintained a cautious attitude while shopping because of the impact of sluggish global economic sentiment.
A total of 70 percent of revenue generated during the annual sales is contributed by the regular customers of the three department stores, which account for approximately 30 percent of overall customers, company statistics showed.