It wants to be in the right place for customers and market it is seeking
PETALING JAYA: Departmental store operator Parkson Holdings Bhd’s decision to close a number of stores in recent weeks in Malaysia and around the region has raised questions on the company’s growth strategy.
The Sungei Wang Plaza outlet located in downtown Kuala Lumpur was the latest store to be closed, shuttering on Feb 26. Parkson had had a presence there for about 30 years. Just early last month, the Maju Junction store was shut down.
A company spokesperson said the mall visitors to Plaza Sungei Wang were “no longer aligned” with the market that they were seeking.
“The customer profile (in Sungei Wang) has changed,” the spokesperson told StarBiz.
Sungei Wang Plaza, opened in 1977, has more than 200 shops and its strata-titled ownership means that many shops have individual owners, a number of whom own multiple units.
The spokesperson said the mall management has no control over the overall ambience or tenant mix. Although Sungei Wang may have fitted in with the overall strategy of the Parkson brand years ago, the situation has changed over the years.
Said the spokesperson: “This (departure) is part of our overall strategy in line with the changes in the marketplace. Parkson should be in the right place for the customers and market we are seeking,” the spokesperson said.
Parkson occupied a couple of floors totalling 107,000 sq ft in Sungei Wang. The company also has another outlet in upmarket Pavilion KL, which opened in 2007, and located half-a-kilometre from Sungei Wang Plaza. According to Pavilion Real Estate Investment Trust’s 2016 annual report, Parkson was among the top-10 largest tenants in the mall.
On the regional front, English language daily Vietnam News reported that Parkson Flemington also closed the company’s Ho Chi Minh store on Feb 27.
According to Henry Butcher Retail managing director Tan Hai Hsin, Sungei Wang Plaza still has potential due to its strategic location.
Tan said: “This is the same as locating in Orchard Road Singapore, Siam Square in Bangkok, Nathan Road in Hong Kong, Oxford Street in London. The main challenge of Sungei Wang Plaza is the ownership of its property.
“It is a strata-titled shopping centre with hundreds of owners. When the external retail market and consumers’ shopping behaviour changes, a strata-titled shopping centre is not able to react to the changes quickly due to its multiple ownership.
“Firstly, it requires consensus from the owners in the mall before any action on refurbishment and reconfiguration can be done. Secondly, it is difficult for the management to change the configuration of the retail shops based on market changes due to the multiple ownership,” said Tan.
Other older malls facing the same challenge of strata-titled ownership include Pertama Complex and Campbell Complex.
“But Pertama Complex is well-known as a centre for a wide selection of leather goods and uniforms. No other shopping centre in Malaysia has this competitive advantage.
“Pertama Complex refreshed its building facade last year, while Campbell Complex also undertook refurbishment last year in order to meet the market changes,” Tan said.