By: Inside Retail Asia
Japanese department-store operator Takashimaya is banking on its Vietnam and Thailand flagships to drive growth this year as it seeks to achieve profitability in its Southeast Asian business.
To date, Singapore has been the sole profitable store outside Japan, but this financial year the Takashimaya Vietnam store in the Saigon Centre in Ho Chi Minh City is expected to produce 100 million yen (US$919,000) in operating profit and the company’s president Yoshio Murata told Nikkei in an interview he sees Vietnam as “another Singapore” in the future.
Takashimaya opened its first Southeast Asian store in 2013 in Singapore. Located in the heart of the Orchard Road precinct, that store took several years to turn into the black but now drives the retailer’s business in the region. Last year it reportedly earned 3 billion yen (US$27.2 million) and this year is reportedly on track to achieve 4.8 billion yen ($44 million) in operating profit.
The Vietnam store opened in 2016 and struggled initially before the company refocused its offer by stocking more mid-market brands, a strategy which already seems to be working. The company is believed to be exploring an opportunity to open a second store in the capital Hanoi where it is investing in an urban-development project including a bilingual school.
Takashimaya’s most recent store in the region is at the IconSiam shopping centre in Bangkok, which opened November last year.
As the company learned in Vietnam, the key to its success is likely to lie in stocking more mid-range products rather than focusing purely on the luxury sector as the train will bring more middle-class shoppers.
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