Tonlin Department Store to lay off over 100 workers in Taoyuan

Taipei, Dec. 9 (CNA) Tonlin Department Store Co. (統領百貨), one of Taiwan's oldest department store operators, said Friday that its Taoyuan branch is planning to cut its workforce by laying off more than 100 workers.

The Taoyuan branch, located in front of the Taoyuan train station, began operations 21 years ago, serving as an important venue for residents in Taoyuan City for shopping and entertainment.

However, the outlet has failed to counter escalating competition as its rivals such as Shin Kong Mitsukoshi Department Store (新光三越) and Far Eastern Department Store (遠東百貨) have expanded their operations in the same downtown area.

The booming e-commerce industry has also taken business from the physical retail sector, posing a greater threat to the store, which has a relatively smaller scale of economy compared to its larger rivals.

Tonlin said that it will abide by the Labor Standards Act and other related labor regulations to carry out the layoffs. The employer and its employees have entered negotiations on the layoffs and the amount of compensation is still being calculated, Tonlin officials said.

The Department of Labor of the Taoyuan city government said that it will step in to deal with the layoff talks to protect the rights of the workers. Many of the affected employees have worked for the Taoyuan branch for about 20 years.

According to local media reports, the layoffs will reduce the number of employees at the Taoyuan outlet by two-thirds. In addition to the Taoyuan branch, Tonlin also runs another outlet on a busy section of Zhongxiao East Road in Taipei.

Despite the layoff news, shares of Tonlin remained resilient, up 0.50 percent to close at NT$30.15 (US$0.03), and even outperformed the Taiwan Stock Exchange Friday, when the weighted index ended up 0.18 percent at 9,392.68 points.

Due to pressing competition from its rivals and e-commerce, Tonlin's revenue has been on the decline from a recent peak of about NT$2 billion per year. In the first 10 months of this year, its sales stood at NT$573 million, little changed from a year earlier, the company said.

Chen Wen-lung (陳文隆), Tonlin's spokesman, said that the department store will spend about NT$750 million to remodel the Taoyuan branch. The business transformation program will kick off in February and will continue until January 2018, Chen said.

He said that after the remodeling, the Taoyuan branch will accommodate a hypermarket, trendy fashion brands offering affordable products, and large restaurants. Due to the reduced workforce and streamlined operations, he said that the outlet's operating costs will fall accordingly after the business transformation.

In the first nine months of this year, Tonlin posted NT$0.21 in earnings per share (EPS), compared with NT$0.30 in EPS a year earlier.

(By Esme Jisng, Chiu Chun-chin and Frances Huang)ENDITEM/J