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Home > Breaking News > Singapore > Story
Oct 31, 2008
Retailers face hard times
Smaller players offering mid- to high-priced items may be worst hit
By Tessa Wong
A SHAKE-UP in the retail industry is looming as worries over the economic outlook threaten to crimp spending.
Award winners
PHOTO: PARAGON
BEST RETAIL CONCEPT: Paragon Market Place. The revamped supermarket features a speciality area with more than 500 premium products, and a new catering service that comes with a personal chef.
... more
Industry players are worried that the impact of the current downturn will be worse than that during the Sars outbreak in 2003, or the Asian financial crisis a decade ago.
Speaking on the sidelines of the Singapore Retailers Association's (SRA) glittering annual ball last night, several said they expect smaller retailers who offer mid- to high-priced items, such as gourmet food or high-street fashion, to be hardest hit.
Ms Lau Chuen Wei, SRA's executive director, explained that larger retailers have deeper pockets and are therefore better positioned to weather drops in sales.
Wealthy consumers who can afford high-end luxury items will continue to shop, she added, while retailers offering budget buys, such as This Fashion or Daiso, will probably thrive as shoppers seek to cut costs. 'Instead of that $100 dress, a shopper may now buy a $40 dress instead.'
Some retailers are already reeling.
Business development manager Tan Yew Jin of Alpha Sky, which runs the local franchise of French shoe brand Schu, said it is considering closing down one of its two outlets here. Its shops are at Wisma Atria and Suntec City.
He said sales for one of its outlets dived by up to 60 per cent last month. 'We could not even cover our costs,' he lamented.
Retailers who are not in malls could be another vulnerable group, said Mr Danny Yeo, director of retail at property consultancy Knight Frank.
Mall tenants can work collectively and thus gain more leverage over their landlords. Stand-alone shops, on the other hand, will have to pay the going rate, or pull down the shutters.
But there is a silver lining, experts said: Shoppers will benefit. With retailers desperate to survive, they will start slashing prices and offering deeper discounts to remain competitive.
Despite the bleak outlook, SRA president Jannie Tay sought to allay fears in her speech at last night's event.
'We have been anticipating bad news, but in reality, retail is still buzzing,' she told the more than 800 guests, clad in dazzling gowns and smart suits for the ball at Raffles City Convention Centre.
Citing the example of this year's Great Singapore Sale, which she said did much better than last year's, she said the retail industry is more structured now than it was a decade ago. It is thus more capable of withstanding challenges.
But Dr Tay did not discount the fact that an uphill road lay ahead, and appealed to landlords to reduce rents to help retailers. 'This is really our cry for help. I see some landlords in the audience and I hope they are listening,' she said.
Soaring rents and overhead costs have been perennial bugbears for retailers here. But though Dr Tay asked landlords to cut rents by between 30 to 50 per cent, as they did during the Asian financial crisis, Knight Frank's Mr Yeo said he held out little hope of this.
He predicted that rents would come down by 2 to 3 per cent, at most.
'At the end, it's subject to market conditions. Landlords will still need to make investments and do business,' he said.
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Home > Breaking News > Singapore > Story
Oct 31, 2008
Retailers face hard times
Smaller players offering mid- to high-priced items may be worst hit
By Tessa Wong
A SHAKE-UP in the retail industry is looming as worries over the economic outlook threaten to crimp spending.
Award winners
PHOTO: PARAGON
BEST RETAIL CONCEPT: Paragon Market Place. The revamped supermarket features a speciality area with more than 500 premium products, and a new catering service that comes with a personal chef.
... more
Industry players are worried that the impact of the current downturn will be worse than that during the Sars outbreak in 2003, or the Asian financial crisis a decade ago.
Speaking on the sidelines of the Singapore Retailers Association's (SRA) glittering annual ball last night, several said they expect smaller retailers who offer mid- to high-priced items, such as gourmet food or high-street fashion, to be hardest hit.
Ms Lau Chuen Wei, SRA's executive director, explained that larger retailers have deeper pockets and are therefore better positioned to weather drops in sales.
Wealthy consumers who can afford high-end luxury items will continue to shop, she added, while retailers offering budget buys, such as This Fashion or Daiso, will probably thrive as shoppers seek to cut costs. 'Instead of that $100 dress, a shopper may now buy a $40 dress instead.'
Some retailers are already reeling.
Business development manager Tan Yew Jin of Alpha Sky, which runs the local franchise of French shoe brand Schu, said it is considering closing down one of its two outlets here. Its shops are at Wisma Atria and Suntec City.
He said sales for one of its outlets dived by up to 60 per cent last month. 'We could not even cover our costs,' he lamented.
Retailers who are not in malls could be another vulnerable group, said Mr Danny Yeo, director of retail at property consultancy Knight Frank.
Mall tenants can work collectively and thus gain more leverage over their landlords. Stand-alone shops, on the other hand, will have to pay the going rate, or pull down the shutters.
But there is a silver lining, experts said: Shoppers will benefit. With retailers desperate to survive, they will start slashing prices and offering deeper discounts to remain competitive.
Despite the bleak outlook, SRA president Jannie Tay sought to allay fears in her speech at last night's event.
'We have been anticipating bad news, but in reality, retail is still buzzing,' she told the more than 800 guests, clad in dazzling gowns and smart suits for the ball at Raffles City Convention Centre.
Citing the example of this year's Great Singapore Sale, which she said did much better than last year's, she said the retail industry is more structured now than it was a decade ago. It is thus more capable of withstanding challenges.
But Dr Tay did not discount the fact that an uphill road lay ahead, and appealed to landlords to reduce rents to help retailers. 'This is really our cry for help. I see some landlords in the audience and I hope they are listening,' she said.
Soaring rents and overhead costs have been perennial bugbears for retailers here. But though Dr Tay asked landlords to cut rents by between 30 to 50 per cent, as they did during the Asian financial crisis, Knight Frank's Mr Yeo said he held out little hope of this.
He predicted that rents would come down by 2 to 3 per cent, at most.
'At the end, it's subject to market conditions. Landlords will still need to make investments and do business,' he said.
[email protected]
