FE SOGO City will open restaurants and underground shopping malls this year

Last year, FE SOGO Department Store achieved a new high in turnover, experiencing a remarkable 10% growth without adding any new operating locations—an impressive performance. Chairman Sophia Huang announced that two new locations, SOGO City and Chongqing FE City, are scheduled to open in 2024. However, due to a three-story renovation plan for luxury brands at the Fuxing Store this year, the overall revenue growth is expected to increase by only 1%. The full opening of SOGO City in the entire area next year, along with the gradual progress of Chongqing FE City, is anticipated to bring about explosive growth in 2025. Preliminary estimates suggest that the two new locations will contribute more than NT$12 billion in revenue. This expansion strategy signals the continued success and growth of FE SOGO Department Store in the retail sector.

SOGO Chairperson Sophia Huang (Second from left) is optimistic that FE SOGO will embrace an explosive growth. (Photo Credit: FE SOGO)

FE SOGO Department Store's revenue in 2023 reached a record high of NT$52.8 billion (tax included), an increase of 10% from NT$48 billion the previous year. Sophia Huang said that last year, the sales of its Taipei stores including Zhongxiao, Fuxing and Tianmu stores reached NT$34.2 billion, of which the Fuxing store alone was nearly NT$20 billion. The Zhongxiao store also stood at NT$10 billion due to the benefits of renovations. The Tianmu store's sales last year exceeded NT$5 billion. The Hsinchu store also achieved good results exceeding NT$6.5 billion.

Sophia Huang provided insights into the progress of SOGO City, highlighting the upcoming developments. In May, Area D is set to introduce 14 restaurants, many of which will be the first of their kind in Taiwan or Taipei City. Emphasizing her optimism about Taipei City's East District as a vibrant "night economy" living area, Huang anticipates that some restaurants will operate until the early morning or even around the clock. The space design will feature distinctive themes, including the creation of a green relaxation area. FE SOGO City is envisioned not only as a shopping mall but also as a consumer lifestyle cluster. Moving forward, Area C is scheduled to open in August and is expected to become the most beautiful underground street in Taiwan, surpassing expectations. These developments highlight SOGO City's commitment to providing a unique and innovative shopping and lifestyle experience for its patrons. (Photo Credit: UDN)

FE SOGO City is gearing up for significant milestones in its development. In May next year, the cinema (Area A) is set to commence operations, followed by the opening of the main retail mall (Area B) in August. The first floor will host international brands, providing a premium shopping experience. Additionally, an open-air restaurant will grace the top floor, contributing to a unique and elevated atmosphere. The overall presentation aims to embody the distinctive FE SOGO brand, showcasing a commitment to excellence and delivering a premium shopping and entertainment destination for visitors.

Concerning Far East City in Chongqing, mainland China, the opening is anticipated in May with an estimated annual turnover contribution ranging from NT$2.0 to 2.5 billion. The shopping mall, covering an area of 70,000-80,000 square meters, is positioned as a medium-sized shopping complex, placing a strong emphasis on enhancing family, entertainment, and catering services. The goal is to foster an experience economy, tapping into the consumption potential of local young families and white-collar workers. Sophia Huang highlighted that in the mainland department store market, competition predominantly involves land developers. Most local shopping malls are developed and operated by these developers. Taiwanese companies, such as FE SOGO, distinguish themselves through their people-centric approach and accumulated experience. Whether it's engaging with manufacturers or providing customer service, Taiwanese companies are known for delivering higher-quality services, presenting a unique advantage in the competitive landscape.

Concerning the renovation of existing stores, Xu Shuxian, the Manager of Fuxing Store, disclosed that the plan was initiated immediately after last year's annual sale concluded. The renovation will primarily focus on expanding the third, fourth, and fifth floors, with a particular emphasis on the luxury floors. The goal is to increase the number of luxury brands available while concurrently expanding the presence of affordable luxury brands. This strategic move aligns with the objective of enhancing the overall shopping experience for patrons at the Fuxing Store.

Wang Guo Dingsong, the President of FE SOGO, emphasized the evolving market dynamics between 2023 and 2024. While consumption experienced a surge after the pandemic in the previous year, the current year reflects a return to more normalized patterns. In response to these changes, retail groups must navigate the market based on their strengths. FE SOGO's operational direction is centered on transformation, innovation, and development. Transformation efforts primarily focus on smaller stores, such as the Kaohsiung and Dunhua locations. Notably, the Kaohsiung store experienced an almost 50% increase in operating profit following its transformation. For medium and large stores, including those in Hsinchu, Taipei, and Tianmu, the strategy involves introducing new brands, developing new products, and making adjustments to accommodate changing market trends. Regarding development, FE SOGO is eyeing new locations, including Chongqing Far East City and SOGO City, as part of its forward-looking approach to expansion and growth.

Wang Guo Dingsong believes that in recent years, brand manufacturers have expanded their choice of channels and have a more influential role in channel operations. Looking ahead, department stores are expected to integrate brands and various VIP clubs in their operations, enabling customers to become members. The idea is to shift from manufacturers entering malls independently to collaborating with department stores, working side by side. In this collaborative approach, it's not just about brands fighting independently for attention, but about jointly attracting customers and creating a symbiotic relationship between manufacturers and department stores. This strategy aims to foster strong partnerships with manufacturers, emphasizing the importance of collaboration over competition. This approach is reflected in the strategic thinking within FE SOGO stores in Taiwan, where there is a deliberate effort to ensure that every space is utilized effectively, aligning with this collaborative operational model.