SEIBU: SMALLER, MORE FOCUSED
Byline: Kavita Daswani
HONG KONG — The boutique department store Seibu is poised to undergo a $20 million facelift.
Owned by Dickson Poon, the retailer-entrepreneur who also owns Harvey Nichols in London and Leeds, together with the rights to distribute names such as Ralph Lauren and Tommy Hilfiger here, Seibu, whose 10-year lease is expiring, will shrink in size as part of the renovation.
The four-floor store in Pacific Place, a popular shopping center that is also home to such names as Celine and Gucci, will be reduced to three floors. Currently, the store is spread out over 133,000 square feet. Level three is being handed back to Swire Properties Ltd., the landlord, this summer, leaving a basement and two other floors for Seibu. The third level was primarily subleased by Seibu to top-rung resources including Escada, Fogal and Hermes. And while some of these tenants will be able to stay — and indeed expand their spaces once the Seibu lease runs out — others cannot be accommodated.
“It’s a positive move,” said Gerard Low, Swire’s general property manager for Pacific Place. “It will allow Seibu to become more focused and get on with running its business. It will be good for the whole center.”
Relinquishing one floor has also provided Seibu with the impetus to step up its image overhaul — something that has started this spring. The store’s new direction, according to Seibu’s chief operations officer, Sarah O’Donnell, is to appeal to a younger sector of the market. New, trendy labels from the U.S., Europe and Japan are gradually being added to the fashion mix. These include Paul Smith and John Rocha jeans, and avant-garde Japanese labels such as Toilet and Virus. In fact, a special corner will be devoted to 18-to-35-year-olds. O’Donnell estimates that about one-third of the new brands coming in for fall 2000 will be Japanese labels. The new interior will be designed by British architect Rodney Fitch.
“By the time we are ready and fully reopened this fall, it is going to be a different store,” said O’Donnell.
Seibu has already moved its accessories division to a more prominent space and has begun stocking more affordably priced collections, at prices starting around $70. (U.S. dollar figures are converted from Hong Kong dollars at current exchange rates.) Another new addition is the Japanese beauty brand Ipsa.
Seibu’s holding company, Dickson Concepts Ltd., anticipates profits of around $41 million for the first six months of 2000. Neither officials from Seibu nor Dickson Concepts would divulge store profits, although O’Donnell said that “the time is right to do this, as we’re in a very healthy position. We’re making money.”
Some third-floor retailers have already been affected by the move.
“We are in the process of negotiation with tenants of level three, most of whom want to expand,” said Swire’s Low. “If there is a vacancy or an opportunity, we will let them know. If we can’t accommodate them, they will have to wait.”
He added that the overall intention was to keep the retail mix the same, with the emphasis on top-tier brands.
Slated for expansion after the shake-up are Hermes and Escada.
Escada will be going from its existing 2,500-square-foot space to more than 5,000 square feet, according to the German brand’s managing director for Asia, Sandra Leung. The new Escada store will be regarded as the city’s flagship, carrying everything from accessories to the highest-end apparel collection. Escada will take over the space currently occupied by Gentlemen Givenchy and Tse Cashmere, which are moving into Seibu.
“We’ve been told that because of shortage of space, we will have to move inside Seibu, to level two, without the exposure we are getting at the moment,” said David Hong, managing director of the Swank Shop, which runs the Givenchy operations here. Hong said he had hoped to be able to expand the store on its present premises.
“We’re disappointed, but given the circumstances, we’re still happy to have found some space inside Seibu,” he said.
Another men’s wear brand, Ermengildo Zegna, will move into one of Seibu’s competitors, the multibrand Lane Crawford. Louis Vuitton, however, stands to benefit hugely from the situation. Its current space of around 1,200 square feet will be expanded to 3,500 square feet. The new increased Vuitton will open in December, another link in an ongoing Asian expansion drive.
A spokeswoman for Dickson Concepts said that the rest of the year had been earmarked for changes and improvements. Also in the works is a personal shopping service, where customers will be invited to the store to brief merchandisers as to what they are in the market for that season. All the Dickson stores — from Harvey Nichols in London to American accessories label Coach here — will be approached for the right merchandise and shown to customers via an elaborate videoconferencing facility.
“The concept will enable Seibu to increase sales and profitability without incurring additional inventory costs,” said the spokeswoman. “Simultaneously, our customers will be able to easily access and purchase all the collections from all the world’s leading designers.”
The service will be launched sometime this year.
One of the most significant changes to the store will be to the basement, currently a food hall that includes several fast-food outlets. Seibu wants to enhance the floor by adding a champagne bar, a high tech Internet cafe and a top-of-the-line Swiss bakery.
Two-thirds of the $20 million renovation tab is being funded by A.S. Watson Ltd. here, which specializes in food retail and is part of the publicly held Hutchison Whampoa. Dickson Concepts is also planning changes — specifically to the food retail sector — of its second Seibu store, in the busy Causeway Bay area here.