FOR this week's Power Lunch interview we had the opportunity to catch up with Andrew Lim, managing director of Sogo (KL) Sdn Bhd, at the Sogo Siang Seafood restaurant.
Upon introduction and query as to my background, Lim informed me that we have a shared a similar background. We were both from Penang, reading law and working with newspapers, although not quite sharing the rapid pace in rank promotion.
“I was a cub reporter in 1977 with The Straits Echo. I became a reporter and was promoted to sub-editor. I was there for a year, then I went to the UK to continue my studies in Law (Cardiff University). I was an English Literature student at Penang Free School. I was in the Middle Temple and got my barrister-ship way back in 1981. I didn't even have money to stay on. The call was in July, so I couldn't afford the three months. So, I was an absent chair. I've been practising for 25 years in Penang. My father and sister are barristers. We have 13 lawyers in the whole extended family,” Lim informs me before explaining how his involvement with Sogo started.
Sogo was originally fully owned by Sogo Japan. Lim was previously their legal advisor and a board member of Sogo KL. In 2002 Lim initiated the management buyout and Sogo is today 100% Malaysian owned and operated, but with a franchise agreement with Sogo Japan to allow the continual usage of the Sogo name.
He tells me that the agreement was structured in such a way that they have full control over the management of the store and since then, they have adapted it to fit the needs of their Malaysian customer base.
“This is not McDonald's where you can have uniformed standardisation. We have a mass of products and customers here and each customer has his or her individual need and requirements. We incorporated the best of what they have in Japan and adapted to what the customers wish for in Malaysia.”
For a brief run-through of their story, Lim shares how Sogo was previously focused on international luxury brand goods. From 2002, it has focused on high-end Malaysian labels but an emphasis on maintaining a 5-star ambience.
He says all the Malaysian brand names have worked closely with Sogo. He, however, prefers to view this not just as a supplier-client relationship but rather a partnership as he says the relationship with the brand owners has spanned over a decade.
“Malaysia MODA started in KL Sogo. In those days, the 7th floor had an allocated space for all the young designers of Malaysia to design clothes. Carven Ong was one of them. It's was like a little boutique environment for them to conduct their business,” he says, showing pride in our home-grown designers.
He tells me that if I were to look into their backgrounds, I would be impressed by how much they've trained in perfecting their art and by how far they've come.
“SS Chiang of Bonia is very low profile and a wonderful man. He's a leather craftsman. He started off as an apprentice making handbags in Penang. In those days, Penang island had free-port status and all the leather went there free of tax. All the apprentices would go there to learn to make things. Datuk Jimmy Choo also started his shoe-making trade in Penang. We carry all the top Malaysian brands. We deliberately niched away' from the international brands.”
As we discuss the brands that are carried in the Sogo store, Lim explains that some people don't realise it but brands such as Bonia, sourced their leather from Italy, worked with Italian designers and have steered away from manufacturing in China to maintain a high-standard of quality.
As we discussed the brands that they're currently carrying and their future plans, I can't help but wonder if it's in their books to anchor a mall. Since many departmental stores have gone from starting as standalone formats, but have embraced the change to a smaller presence in shopping malls. “We have had many proposals coming to us requesting us to consider anchoring them. But, they don't have that large a space... It's sometimes difficult to work with developers who can accommodate our large format. We have been actively considering plans for the last three years and have two or three sites under discussion,” he says without giving away anything further away.
However, for the moment they're focusing mainly on improving the shopping experience at their KL Sogo departmental store. Informing me that the ongoing renovations are just the tip of the iceberg and that they've engaged an American design team to do a makeover on their store.
“They're very well-established in California as well as in Japan. In the worldwide retail trade, the Americans have actually refined retail to a very high pinnacle. They can measure the light factor, they call it the lux factor. They've studied what kind of lighting is suitable for customers mood to shop, what sort of lighting is suitable for them to feel comfortable.”
KL Sogo stands at a gross of 1.2 million sq ft with 700,000 sq ft available as shopping floor space. However, only 450,000 sq ft of that is currently being used for departmental store sales. Lim explains that the remaining has been sectioned for restaurants, lounges and a soon-to-open wellness centre. He informs me that there are two floors offering dining options. The lower ground floor comprises franchise food outlets, the sixth floor offering a food court to satisfy all palates, and their Sogo managed Chinese and Japanese restaurants to satisfy the gastronomic needs of the leisurely patron.
After telling me about the layout of their floor space, he throws in a line while feigning grudge, before laughing it off. “The most important human being in the retail industry are the lady shoppers,” he says, while acknowledging it's something they have taken to heart to respect.
This is most reflected in their ladies focused lounge.
“Basically, it's a very women orientated lounge. Manicure, pedicure, spas, saunas, steam baths and gym area for ladies only. Men are very badly treated. We just throw them to a small gym. They can use the karaoke room and access our computers. The platinum lounge is a place where they can chill out. This is basically meant for all the Datuk's and Tan Sri's to sit there while their wives shop. Then they'll call up and say, darling come down with your credit card. You have to pamper your top customers,” he shares with a hearty laugh.
But, for the men out there, don't fret. Its wellness centre will be set to cater to both men and women. Peak Fitness, is set to soft-launch in May/June and to hard launch by year-end. Lim tells me that it's not just a gym but that they have taken to overlay the usual gym facilities with wellness advice and counselling. They'll be offering diet advice and even simple medical testing.
“We want you to live long so that you can carry on being our customers.”
On why they have chosen to undertake the wellness centre themselves and not to simply lease it out to external operators, Lim shares that it's always been their preference to be able to self-manage.
“We like to control the level of service and the experience that our customers have. You can't do that when you're working with a tenant. So long as you pay me rental I have no say in what you do when you are actually administering. I cannot micro-manage the administration of your services.”
Online shopping and credit cards
In addition to the wellness centre and extensive makeover, Sogo KL is taking baby-steps to add to their appeal by including Sogo's own products. They currently do have Sogo branded supermarket products and are exploring their online possibilities.
“We are actually putting in our online platform and have done a lot of study on e-commerce. The challenge is actually the logistics of the delivery of goods to your customers. We went to do a study trip in San Francisco and were very lucky to get a briefing by Macys. We met Kent Anderson, the president in charge of Macys.com, and he told us that they had to build up a critical mass of products on their website. You need to have that mass of products so that you become an active website. If you have only 10 products, nobody cares,” he shares, while inquiring about my online shopping habits while I was living in the US.
Admittedly, I did partake in quite a bit of it, and have the store branded cards and credit cards to prove it. Which brought me to enquire as to whether there will be a progression their current Sogo card would be taking. Slightly cautious to not spill the details too soon, Lim tells me that it is indeed in their plans.
“We are working with a bank to make it into a credit card. I think we're going there and have just finalised our discussions with them. We are waiting for them to come back, I think they are offering both Visa and MasterCard facilities,” he says.
And the end of this year should see the launch of their Sogo credit card. With my tummy happily satiated and the topics for our interview discussed, we adjourned to tour the departmental store and to explore their Gold and Platinum lounges.
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