Tonlin Department Store Co (統領百貨) yesterday said that its Taoyuan branch is planning to lay off more than 100 workers.
The branch in front of Taoyuan Railway Station began operations 21 years ago, serving as an important shopping and entertainment venue for local residents.
However, the outlet has failed to counter escalating competition as rivals, such as Shin Kong Mitsukoshi Department Store Co Ltd (新光三越百貨) and Far Eastern Department Store Co (遠東百貨), have expanded their operations in the same downtown area.
The booming e-commerce industry has also taken business from the physical retail sector, posing an even greater threat to the store, which has a relatively smaller scale compared with its rivals.
LABOR RULES
Tonlin said that it would abide by the Labor Standards Act (勞動基準法) and related regulations on implementing layoffs.
Management and employees are discussing terms and compensation for laid-off employees, company officials said.
The Taoyuan Department of Labor said it would join the negotiations to protect the rights of the workers. Many of the affected employees have worked for the store for about 20 years.
According to local media reports, the layoffs would reduce the number of employees at the Taoyuan outlet by two-thirds. In addition to the Taoyuan branch, Tonlin has an outlet on Zhongxiao E Road in Taipei.
Despite the staff reductions, Tonlin shares remained resilient, climbing 0.5 percent to close at NT$30.15 in Taipei trading yesterday, outperforming the TAIEX, which closed up 0.18 percent.
Due to the increased competition, Tonlin’s revenue has been on the decline from a peak of about NT$2 billion (US$62,775 million) per year.
In the first 11 months of this year, Tonlin’s cumulative sales stood at NT$619.7 million, down 0.47 percent from a year earlier, the company said in a filing with the Taiwan Stock Exchange.
RESILIENT STOCK
Tonlin spokesman Chen Wen-lung (陳文隆) said that the department store would spend about NT$750 million remodeling the Taoyuan branch.
The business transformation program is to begin in February and would continue until January 2018, he said.
He said that after the remodeling, the Taoyuan branch would have a hypermarket, affordable fashion brands and large restaurants.
Due to the reduced workforce and streamlined operations, Chen said that the outlet’s operating costs would fall accordingly after the transformation.
In the first nine months of this year, Tonlin posted earnings per share of NT$0.21 compared with NT$0.30 the previous year.
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