Department Stores Open Up "Sideline" To Make Profits

The "shopping mall" developer is playing the leading role in the shopping center, which is about to usher in the traditional retail brand.

Reporters learned yesterday.

Expand the "sideline" of shopping centers

The quality department store seems to be tired of the "wedding dress" for the owners of the project.

Reporters learned yesterday that following the renovation of the shopping mall department store of the department store last year, Wangfujing department store formally entered the shopping center format.

According to the introduction, many shopping centers in Wangfujing are located in the foreign market.

Liu Bing, President of Beijing Wangfujing department store (Group) Limited by Share Ltd, said consumers' demand for shopping malls is no longer limited to shopping, which provides a platform for the development of shopping centres.

Another big native soil

In addition to Beijing's local retailers, new world stores and Yintai are also in the process of layout.

Make up for short profits of department stores

With the soaring operating costs of property rents and so on, due to the general mode of joint operation, the net operating profit of domestic quality department stores is generally not high.

In the view of the industry, many department stores that have ample cash flow hope to make up for the low profit margins of the department stores by reducing their operational risks through the pformation of shopping centers.

A quarterly report of Beijing's three major local commercial companies, Xidan shopping mall, Beijing urban and rural areas and Wangfujing department stores, shows that Wangfujing's department stores account for the highest profit. The first quarter's business revenue is more than 4 billion 800 million yuan, with a total profit of nearly 300 million yuan. Beijing's urban and rural 1-3 month business income is about 630 million yuan, with a total profit of about 42 million 350 thousand yuan.

In the first 3 months, a total of about 960 million yuan of Xidan shopping centres were sold, with a total profit of about 45 million 910 thousand yuan.

Liu Hui, a business consultant, said that compared with the real estate developers who had "collected profits", the department store, which was rather "hard", actually earned only a small portion of its profits, and most of the proceeds were attributed to the property owners.

He believes that due to the rapid increase in land value, the risk of department stores buying property and operating shopping centers is less than that of opening department stores, and the rental income of operating shopping centers is significantly higher than that of commercial retail outlets.

Cross boundary operation has threshold

In the industry's view, although shopping centers and department stores are selling goods stores, the profit models of the two formats are totally different.

Department stores earn profits by selling goods, while shopping centers rely on regional economic growth and other factors to get assets appreciation.

Department stores and shopping centers have different operational objectives, setting the threshold for the integration of the two formats.

"In the process of role conversion to shopping centers, the location of department stores should be pformed from selling products to attracting customers."

Guo Zengli, director of China shopping center industry information center, said that because of the advantages of brand resources and retail experience, the department store's pition shopping center's threshold is lower than that of real estate developers.

Li Sheng, deputy director of the China Federation of trade unions' committee of experts' work, also believes that taking unified cash register department stores and cash flow control, the management of brands is relatively easy.

After the pformation of shopping centers in department stores, the brand will independently collect silver, which is a severe test for department stores.