Far Eastern Department Stores Ltd (FEDS, 遠東百貨) yesterday said that it plans to open new stores in Taiwan and China in the second half of this year to boost sales as the retail industries in both countries have shown signs of slowing growth.
“We plan to open new stores in Taiwan in view of a higher level of household savings,” FEDS chairman Douglas Hsu (徐旭東) said after an annual shareholders’ meeting in Taipei.
The company, which operates Far Eastern and Sogo department stores as well as A-Mart (愛買) hypermarkets, plans to launch a new department store in Taipei’s Xinyi District (信義) in October.
It would be a “smart” shopping center that aims to make consumers’ shopping experience more enjoyable and convenient, it said.
The company said it is optimistic about the planned store, as a recently opened Apple Inc store nearby has posted robust sales, and would also attract customers to the department store.
FEDS declined to elaborate on the planned department store, such as the composition of its retail tenants, citing commercial secrets.
In Taiwan, physical stores have faced challenges from e-commerce and customers’ rapidly changing shopping habits, so FEDS has been collecting data to understand customers’ preferences, it said.
“We aim to make our department stores the third-most frequently visited place, following your home and office,” FEDS chief merchandising officer Chris Liu (劉志成) said.
In the first five months of this year, cumulative revenue fell 2.04 percent to NT$15.24 billion (US$489.8 million), from NT$15.55 billion a year earlier, the company said.
Net income in the first quarter climbed 17.22 percent annually to NT$457.65 million, with earnings per share (EPS) of NT$0.32.
However, gross margin slipped by 0.46 percentage points to 52.09 percent over the period.
The company would open a City’Super supermarket in Xinyi and an A-Mart outlet in Taichung’s Shuinan (水湳) in the fourth quarter, it said.
A new Far Eastern department store is expected to open in Hsinchu County’s Jhubei (竹北) next year, while the size of the Kaohsiung Top City (高雄大遠百) department store would double from its current size, the company said.
The retail market in China improved recently after being sluggish since last year due to the US-China trade dispute, Hsu said.
The company has been looking for suitable targets to expand its market share there, he said, without giving a specific timeframe for possible mergers.
Shareholders yesterday approved a plan to distribute a cash dividend of NT$0.85 per share, for a payout ratio of 90.43 percent based on last year’s EPS of NT$0.94.
It represented a dividend yield of 4.25 percent based on the stock’s closing price of NT$20 yesterday.
The stock has risen 28.62 percent this year.
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