The Taiwan group open its store in Beijing

BEIJING - Pacific Department Store Co Ltd, a subsidiary of Taiwan's Far East Group, has closed its two department stores in Beijing and withdrawn from the Chinese capital.

The store at Pacific Century Place (PCP) near the Sanlitun area served its last customers on Tuesday after a 10-year run.

The other outlet, which opened in the Wukesong area in 2009, closed on Oct 20.

Though the department store said it closed the outlets because of disagreements over lease renewal terms, experts said the stores weren't doing well.

"Due to its unclear brand position, Pacific Department Store failed in Beijing," said Lai Yang, director of the Beijing Vocational College of Finance and Commerce's business research institute.

Lai said there are various types of department stores and Pacific, which targeted local office workers, should have focused on fashion. The department stores that follow that strategy hold frequent promotions, but Pacific rarely did that, he said.

The brands available in the Pacific stores were another problem, Lai said.

"Pacific's brands composition did not track the market's development during the past 10 years," he added. "Some current fashion brands, such as Zara and H&M, did not locate at its department stores."

Li Zhiqi, chairman of China Brand Creative Team, a marketing consultant firm, said that the Pacific stores priced themselves above what their target shoppers would pay.

However, the company isn't giving up on Beijing, Tao Yucong, general manager of Beijing Pacific Department Store Co, told a news conference on Sept 22.

Tao said that the company might open new stores in the next year, with three locations under consideration. The new stores could be in shopping malls, Tao said.

The PCP store welcomed far more shoppers on its last day than usual with a "Bye-bye Sale", with discounts of up to 70 percent.

"I seldom bought anything here before, but I think there should be special discounts on the last day," said Zhang Xue, a local office worker who spent her lunch break at the store.

Turnover at the store had increased by 30 to 50 percent since September, compared with last year, the Beijing Youth Daily reported on Oct 21.

Some brands were preparing to move, rather than offering discounts.

"We will move the goods and staff to other stores. After all, our brands have plenty of counters around the city," said a cosmetics saleswoman, who didn't want to be identified.

The company will end its labor contracts with 245 staff, who would be paid compensation of 8 million yuan ($1.26 million), Tao was quoted by the Beijing Times as saying.

Some staff will continue to work for at least another month to wrap up consumers' problems, said He Yan, a receptionist at the PCP store.

Consumers holding prepaid cards can get refunds until Nov 26 at the PCP store, the company said on its website. Refunds will be available at the Wukesong site until Oct 31, 2012.