Saturday, March 10, 2007

Oldest shopping mall on the cusp of rebirth

Anissa S. Febrina
The Jakarta Post

Jakartans born in the 1980s associate Sarinah on Jl. Thamrin, Central Jakarta, with cafes, including the music-themed Hard Rock Cafe, which was replaced by the buzzing Manchester United cafe.

It's popular with teenagers and office workers, who, after blowing their wages on drinking, occasionally get involved in the inevitable Friday night brawl in the parking lot.

Stepping into Sarinah department store itself though is like turning the clock back to the early 1980s.

When its escalators were installed in the 60s, it was a first for the country.

Unlike in other department stores, where it is often cold enough to sport the latest winter fashions, one could hardly feel the air-conditioning inside the six-story Sarinah last week.

"For me, Sarinah is a meeting point, on weekdays for lunch and on weekends to have fun," said Yulia Andarini, a manager at a bank nearby the premise.

And that is all it is about for Jakartans, at least until state-owned company PT Sarinah Persero, which runs the commercial complex, turns it into Sarinah Square.

Soon, that is.

Just six months after it was launched in August, the Rp 200 billion project -- which will transform the current Sarinah building along with neighboring government offices into one of the city's most prestigious locations -- more than a dozen interested investors have signed up.

"It is a prime location and it has high commercial value," the company's president director, Ketut Arnaya, said last week.

Currently, the dim office spaces on the upper levels of the department store fall into the B-class category, despite its strategic location.

Most of those listed in Sarinah Square's shopping cart of potential investors are renowned property developers who already have their own shopping malls and mix-used complexes.

Ones that probably contributed to Sarinah's downturn as it was overwhelmed by the competition posed by modern retail outlets.

Part of the reason why Sarinah lost the retail battle is due to "Indonesia's reckless liberalization of the modern retail industry," Arnaya said.

"As part of the letter of intent with the IMF (International Monetary Fund) in 1998, Indonesia must open its retail industry to foreign players.

"Unfortunately, we do not have a clear set of regulations on that issue," he said.

But probably, aside from previously being the typical state-owned company that lacks professional management, Sarinah was born of a vision contradictory to the concept of free market.

Back in 1960, when Sukarno mulled the concept of modern retail through the development of a 14-story department store in the heart of Jakarta, many opposed the idea, saying it was inappropriate considering the economic recession.

But, for Sukarno, department stores were not shrines to capitalism and consumerism.

"In my view, according to my observations ... a department store acts as a price stabilizer," Sukarno said as quoted in Bunga Rampai Perjalanan Sang Dewi, a book on the history of Sarinah.

He was referring to the stores he visited in the socialist cities of Moscow, Prague, Warsaw and Ulanbator.

"If we sold a kebaya (traditional blouse) for Rp 10 in the department store, others would not dare sell it for Rp 20 outside," he said.

Thanks in part to funding assistance from Japan, and advice from its seasoned retailers Seibu and Matsuzakaya, the project was launched in 1963.

It was named after Sukarno's governess as a symbolic gesture to support the role of women in economic development.

When it was opened to the public for the first time in mid-August 1966, Jakartans were flabbergasted by Sarinah's modernity, from escalators to electronic cash registers.

In order to keep to Sukarno's vision, the department store advertised its grocery prices weekly in newspapers, a move aimed at minimizing price speculation outside.

Although at first 70 percent of its goods were imported, Sarinah later partnered with local microentrepreneurs, helping them to grow.

But the glory days of socialism lasted less than a year at Sarinah. Soaring inflation and mismanagement forced the supposed center for "the economy of the common people" to surrender to "the economy of the elite".

By 1968, it survived only through the business generated by entertainment center Miraca Sky Club and a casino. Later, in the early 1990s, came American symbols of modernity like fast-food chain McDonald's and the Hard Rock Cafe.

Much as it is today.

"We have had our ups and downs," Arnaya said. "But we are now back on track, assisting microentrepreneurs as well as trying to keep up with what consumers want."

And consumers want sparkling office buildings, towering apartments, marble-floored shopping malls, modern food courts and more hotels. At least, according to Sarinah's management.

"We plan to take over the BPN (National Land Agency) and BSF (National Censor Body) offices. And Sarinah Square will be managed under a build-and-operate scheme," Arnaya said.

And, as he pointed out, "it will bring more income for the city, more jobs and more options for consumers".

Looks like Sukarno's vision of Sarinah has become rather passe.