Parkson’s Maju Junction exit an isolated case, says RGM MD

According to Tan, the department store’s business is doing well in Malaysia


Parkson Holdings Bhd’s decision to terminate its tenancy in Maju Junction Mall, Kuala Lumpur (KL), does not reflect the retailer’s overall performance.

Retail Group Malaysia (RGM) MD Tan Hai Hsin said the department store’s business is doing well in Malaysia.

According to Tan, the exit situation is an isolated case because Maju Junction Mall and Parkson are considered as one body.

“Parkson leased the entire retail building and sub-leased some of the retail lots to other retail operators.

Several of the food and beverages (F&B) operators in the mall were Parkson-owned brands.

“Maju Junction Mall has been facing a tough market environment even before Parkson took over and occupied the entire building.

“This is due to the location of the mall which has its strength and weakness at the same time,” Tan told The Malaysian Reserve.

Maju Junction Mall, the city’s largest shopping street for ethnic goods — especially Malay and Indian — is located along Jalan Tunku Abdul Rahman.

However, over the past 20 years there have been plenty of new malls popping up outside KL’s city centre.

Thus, shoppers no longer need to travel into the city centre to shop.

Tan said Quill City Mall, LuLu Hypermarket, as well as Jakel Mall which was formerly known as Cap Square, and Sunway Putra Mall (previously known as The Mall) are facing the same challenges.

Office workers patronise the F&B outlets and convenience stores during weekdays.

During the weekends however, these office workers shop at malls located closer to their housing area.

Furthermore, these shopping centres are not large enough to attract shoppers from other cities.

Tan said the KLCC shopping district — which includes Suria KLCC and Avenue K — has more than 1.5 million sq ft of retail space, while the Bukit Bintang shopping district features six shopping centres with more than six million sq ft in total which are Pavilion KL, Fahrenheit 88, Lot 10, Plaza Sungei Wang, Low Yat Plaza and Berjaya Times Square.

He added that Maju Junction Mall needs to reinvent itself and offer mixed trade that will attract shoppers from outside the city, as well as tourists.

Tan, however, does not expect other malls in the Klang Valley to face the same fate as Maju Junction Mall because unlike Parkson which rented the entire mall, most of them are occupied with 50 to 200 multiple tenants.

He added that the rapid growth of modern shopping malls also has led to the growth of specialty stores.

Department stores, especially those located in the cities, have been losing market share to specialty stores such as specialty fashion, fast fashion and discount fashion stores.

They have also been losing out to hypermarkets which offer similar retail goods at cheaper prices.

Apart from that, online retail stores are responsible for the decline in traditional malls’ foot traffic.

Having said that, departmental stores in Malaysia are still expected to play an important role in the retail industry for many years ahead.

He said the next generation of department stores in Malaysia will maintain their regular shoppers by integrating new technology to provide a unique shopping environment for their clientele.