Wendy Zhang/ Shanghai Daily news

Pacific Department Store's first local outlet in Xujiahui is expected to sell goods specifically for women by around 2007, as part of a move to improve its competitiveness in the Xujiahui business environment, eastday.com reported.
"Our store in Xujiahui, with a 12-year history, is smaller than other nearby shopping malls, so if we can find new space in Xuhui District for a big department store, the original Xujiahui outlet will be transformed into a female-oriented one," said Jiang Qing, general manager with the Shanghai Pacific Department Store Co Ltd.
"We are targeting the high-end market, and after one-year of restructuring, high-end commodities in our store account for 25 percent of the total, with the proportion expected to increase in future," Jiang said, pointing out that the current business model of the department store is challenged by a growing number of speciality stores from overseas.
Department stores, symbolic of the Xujiahui business environment and also of the fashion development of Shanghai, are a landmark in the city's retail development. So the change shows that local department stores have entered into a new phase, said an industry analyst.
Department stores on the Chinese Mainland are expanding quickly. Shanghai Orient Shopping Center has added four outlets and expanded into the Yangtze River Delta region. Parkson Department Store will soon raise capital via a listing in Hong Kong with the aim of expanding its Mainland presence.
"Growing competition causes fiercer price wars among department stores. We want to avoid such price wars, but many of our brands are not unique to us, and we are not powerful enough to create our own brands for the time being," Jiang explained. "We hope to be the sole agent for some brands to improve our competitiveness," he stressed, predicting that it will be a trend in the future to open department stores in residential neighbourhoods.