Shoppers flocked to Idee department stores (衣蝶百貨) over the weekend, eager to use their coupons for fear the Rebar Asia Pacific Group (力霸亞太企業集團) scandal would turn them into valueless pieces of paper.
Despite a surging number of coupon users, the retailer said they would not have an impact on its operations as eight of the group's accounts totalling NT$240 million (US$7.3 million), will be unfrozen today, allowing the company to make payments to its 700 suppliers and pay employee salaries.
"Normally, coupon usage only accounts for less than 5 percent of our sales and the impact is limited," Idee senior manager Sunny Liu (
PHOTO: LO PEI-DER, TAIPEI TIMES
The company's latest statistics showed that nearly 10 percent of the revenues made on Saturday came from coupons, reflecting weak consumer confidence in light of the snowballing scandal.
To allay the worries of suppliers, Idee decided it would temporarily stop selling coupons. Coupons previously issued, however, would remain valid, Liu said.
Rebar's financial difficulties, which came to light earlier this month, have affected a number of its subsidiaries -- including Idee.
After Idee again failed to pay its suppliers last Friday for the period from Jan. 5 to Jan. 9, approximately 80 percent of its suppliers formed a self-help organization to secure their rights and interests.
Following the second meeting with Idee executives on Saturday night, suppliers agreed to support the retailer as it attempts to weather the storm, abandoning the original plan of cutting ties with the department store.
"Idee president Wang Lin-mei (王令楣) has shown her sincerity and we've decided to fully support the company," said Lee Chih-hsiang (李智祥), a representative of Idee's suppliers.
He added that Wang promised it would make payments every 10 days to facilitate supplier capital flow, boosting the frequency of payments from once a month to three times a month.
In addition, Wang offered to reduce the company's fee charged to suppliers by 2 percentage points during the next three months. Suppliers are usually required to pay 20 to 25 percent of their business income to the department stores they work with.
"Since our capital will soon be unfrozen, suppliers have more confidence in us now," Liu said.
Idee's relations with its suppliers became tense over the past year as its capital flow encountered problems, triggering speculation that the department store might shut down or that management at some of its branches might be replaced.
But the company said again last week that it will maintain normal operations, which would benefit its parent group.
Idee's five branches nationwide booked sales of NT$9.63 billion last year -- a drop of 10 percent from the previous year -- but still pulled in profits.
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