The Fubon Group (富邦集團) will sell its department store business to upscale mall operator Breeze Center (微風廣場) as the retailing business is affected by the nation’s lackluster economic growth, the company said yesterday.
The planned termination of the three-year-old Momo Department Store (Momo 百貨) on Nanjing E Road in Taipei also reflects the increasingly fierce competition in this line of business in Taiwan, the Fubon Multimedia Technology Co (富邦媒體科技), a subsidiary of the group, said in a statement yesterday.
“The company’s board has approved the end of its department store operations, which is expected to be taken over by the Breeze Center in coming days,” Fubon Multimedia said in the statement.
Besides Fubon group, other shareholders in the company include South Korean retail giant Lotte Shopping Co and Taiwan’s Teco Group (東元集團).
The company did not provide detailed financial terms nor the exact timeframe for the business to be handed over to Breeze. Domestic retailers are facing an increasingly difficult environment amid a weakening economy, which has caused consumers to be reluctant to spend.
In the first half of the year, total department store sales grew only 0.9 percent to NT$130.9 billion (US$4.38 billion), the Ministry of Economic Affairs said last month. Fubon Multimedia, which also operates the Momo TV shopping channel and online shopping Web site, as well as Momo personal care and drugstore chain, said competition is becoming more severe among department store operators in Taiwan, where major players have expanded the scale of their business and are using the franchise model in order to stay competitive. “The smaller-scale Momo Department Store has also faced weakening profitability because of suppressed consumer spending in recent years,” the company’s chairman Howard Lin (林福星) said in the statement.
Following the closure of its physical department store outlets, the company will reallocate company resources into its virtual retail channels and aims to build a global platform in the future, Lin said.
The company’s retail business reported NT$18.7 billion in sales last year, up 19.87 percent from NT$15.6 billion in 2011. Sales for this year are expected to exceed NT$20 billion mark, according to the company.
‘ACCORDING TO PLAN’: A company official said that it has set up production sites worldwide to provide services and that its Wisconsin project was going smoothly Hon Hai Precision Industry Co’s (鴻海精密) smart manufacturing center in Wisconsin would begin trial manufacturing in the middle of this year, the company said yesterday, adding that it plans to build a research institute to develop key technologies to support growth over the next five years. Hon Hai, known internationally as Foxconn Technology Group (富士康科技集團), said in an annual report submitted to the Taiwan Stock Exchange that its planned Foxconn Institute for Research in Science and Technology would conduct research into artificial intelligence, next-generation communications, quantum computing, cybersecurity and nano semiconductors in Taiwan. Hon Hai is to make products at the center
STAYING AHEAD: Fitch said that TSMC remains technologically ahead of others, but Samsung is building a new chip fab, while China is investing in its domestic industry As escalating US-China tensions and COVID-19-related production disruptions force US technology supply chains to transform, Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) US$12 billion chip fabrication plant in Arizona would be key to spurring greater US production of core semiconductor components, Fitch Ratings said. “We view the US-TSMC alliance as a first step in building a more autonomous US technology supply chain, given high barriers to entry, specifically related to the significant capital and design capability required for leading-edge semiconductor manufacturing,” Fitch said in a statement on Tuesday. “By working with TSMC, US chipmakers will not face the financial burden of incremental investment
E Ink Holdings Inc (元太科技), the world’s sole supplier of e-paper displays for e-readers and shelf labels, posted its best quarterly net profit for the first quarter in nine years amid increased demand during a traditionally slow season. Net profit soared 80 percent to NT$787 million (US$26.23 million) in the quarter ended March 31, compared with NT$438 million a year earlier. That translated into earnings per share of NT$0.69, up from NT$0.39. E Ink posted lower royalty income of NT$371.23 million last quarter from NT$448.74 million a year earlier, a company financial statement showed. E Ink said that it expects royalty income to
DIVERSIFICATION: Although COVID-19 would push more companies to produce in emerging markets, DBS said that it was unlikely that firms would totally leave China Geopolitical tensions and supply disruptions are expected to accelerate the migration of manufacturing out of China, as concerns about the risk of production concentrated in one country increase, S&P Global Ratings said. Although its economic expansion might be weaker than previous levels due to the accelerated relocation of manufacturing, China’s economic growth would still be stronger than that of most other economies, the ratings agency said. “While absolute growth rates will moderate, we believe China’s economic performance will continue to be a key sovereign credit support,” S&P Global Ratings credit analyst Tan Kim Eng (陳錦榮) said in a statement on Thursday. “Its growth