DFS business slid by 30-plus percent

With the projected decline in revenue collection, the CNMI government must immediately reduce working hours to give the business sector a sense of partnership amid the financial crisis besetting the Northern Marianas, according to Marian Aldan-Pierce, president of DFS Saipan.

Declining tourist arrivals and gloomy consumer outlook led DFS Saipan business to slid by more than 30 percent compared to 1997.

As a result, management had to reduce the number of employees by attrition, consolidated positions, cut down on expenses to bare necessities, reduced working hours and eliminated some benefits. Although the shop’s area had expanded, management only hired 50 percent of the staff it originally planned.

“The non-action on the part of the public sector has created some moral problems within our organization. Our employees ask –why us — why not them? We are partners in business –we have to get away from the “we vs. they” mentality, Aldan-Pierce told delegates in the recently held economic forum dubbed Planning for the CNMI’s Economic Future.

DFS operation worldwide has been severely affected by Asia’s financial crisis. Since it is heavily dependent on the Japanese market, the largest retailer to the traveling public in the Pacific Rim plunged from a $2 billion worth business to $1 billion.

This led DFS Saipan to diversify its manner of doing business. Aldan-Pierce noted that a new section has been add to the corporate organization called the Specialty Retail Development which aims to look for ways on how to improve business which include product development, and joint ventures.

“We are constantly looking at ways to differentiate ourselves from the rest of the retailers,” she added.

Six years ago, DFS Saipan would not have thought about establishing a restaurant as an anchor in the facilities, one proof that its manner of doing business has changed dramatically.

Hard Rock Cafe now anchors the DFS Galleria while Planet Hollywood supports the Tumon Bay Galleria on Guam. Right below the Hard Rock Cafe is the 1,800 sq. ft. retail store selling 100 items ranging from a variety of clothing and merchandise bearing the internationally-know Hard Rock logo.

“Retail-tainment is our new game. The marriage of retailing and entertainment. Our two Gallerias are the classic example of how this works, with interactive departments consisting of active baking, a golf swing room, wave riders, tastings, etc.,” said Aldan-Pierce, adding that the Waikiki store will also be renovated and expanded.

DFS Saipan recently held a grand opening for its newly-built Garapan Galleria where it invested over $25 million. When DFS Saipan management draw up its expansion plan, five years ago, Aldan-Pierce said projections for the future of the CNMI were very good.

There were plans for the establishment of new hotels adding over 3,000 new rooms by the year 2000 as visitor arrivals was also projected to increase to over 800,000. In addition, airlines were expanding its seat capacity which proves the popularity of the Northern Marianas as a tourist destination.

However, halfway through the construction of the DFS Galleria, the Asian region was thrown into an economic crisis, making it difficult for management to backtrack from the project.

“We couldn’t stop construction as it would have been more expensive to mothball the project than to complete it, so we have to make changes to support our current business while continuing with the project,” said Aldan-Pierce.

Established in 1976, DFS Galleria has six hotel shops, an airport store and Galleria — all manned by over 400 employees. Ninety-nine percent of the workforce is local and 85 percent of the management is also local.