Far Eastern Group Temporarily Exits Physical Department Stores in China; Chairman Huang Says Move is to 'Stop Losses and Preserve Strength'

(CNA, by reporter Ho Hsiu-ling, Taipei, 9th) With the recent closure of Far Eastern City in Chongqing, Far Eastern Group's physical department store presence in mainland China has been temporarily reduced to zero. Far Eastern SOGO Chairman Huang Sunny said that with the uncertain prospects for mainland China's economic and domestic demand recovery, the group will first adopt a wait-and-see attitude but will not abandon the mainland market. "We will preserve our strength and avoid unnecessary bleeding," she said. For now, the focus is on successfully managing the Taipei Dome shopping complex, which will provide a stronger foundation for a future return to the mainland market.

Far Eastern Group entered the mainland China market in 1993 and had department store outlets in cities such as Chongqing, Shanghai, and Chengdu, making it the first Taiwanese-funded department store to enter the mainland. However, it has been adjusting its strategy and closing stores in recent years. Far Eastern City in Chongqing, which only opened in May 2024, was also closed at the end of April this year. Currently, Far Eastern Group has no physical department store locations in the mainland China market.

Speaking to reporters after a SOGO shareholders' meeting today, Huang said that while the investment atmosphere in China was enthusiastic before the pandemic, rapid changes in policy and the market environment in recent years have brought more uncertainty to business operations. She noted that the mainland economy has not yet stabilized, and investment prospects are currently unclear.

She said that to be responsible to shareholders and employees, "we must stop the losses," and made the painful decision to close Far Eastern City in Chongqing. She described the decision as a short-term pain for long-term gain, which also provides an opportunity to observe the future direction of development in the mainland.

Huang emphasized that the group will not give up on the Chinese market and will focus on commercial real estate and mall management models in the future. Citing the Baiyang Building project in Chengdu as an example, she explained that it adopts a lighter-asset model based on a commercial real estate concept. Future business models could include self-operation, commissioned mall management, or other lighter-asset approaches.

Huang pointed out that SOGO's most important task at present is to open the entire Garden City area at the Taipei Dome. The hope is to create a new-generation shopping mall different from traditional department stores and shopping centers. The experience gained from managing this mall will give the group "more confidence for a future return to the mainland market."