{"id":7770,"date":"2021-08-15T09:30:00","date_gmt":"2021-08-15T01:30:00","guid":{"rendered":"https:\/\/dollarsandsense.sg\/business\/?p=7770"},"modified":"2021-08-14T18:00:41","modified_gmt":"2021-08-14T10:00:41","slug":"isetan-to-close-its-parkway-parade-store-do-retail-stores-have-a-chance-of-surviving-the-pandemic","status":"publish","type":"post","link":"https:\/\/dollarsandsense.sg\/business\/isetan-to-close-its-parkway-parade-store-do-retail-stores-have-a-chance-of-surviving-the-pandemic\/","title":{"rendered":"Isetan To Close Its Parkway Parade Store: Do Retail Stores Have A Chance Of Surviving The Pandemic?"},"content":{"rendered":"\n

We were greeted to the weekend by an announcement that Isetan Singapore would be closing its store in Parkway Parade in March 2022<\/a> once its lease expired.<\/p>\n\n\n\n

In its announcement, it was interesting to note that Isetan actually extended its lease at Parkway Parade for a period of 15 months till March 2022, which meant that the extension was made in October 2020, when things in Singapore were starting to reopen.<\/p>\n\n\n\n

However, as Singapore returned to Phase 2 (Heightened Alert)<\/a> a few months ago, it appears that the company has decided that it no longer make business sense to continue its operations in Parkway Parade. Isetan also closed its store in Westgate last year though this was a decision that was made in 2019 before the pandemic.<\/p>\n\n\n\n

This means that from 2022 onwards, Isetan will be left with just three stores in Singapore \u2013 its flagship store at Shaw House, Tampines Mall and NEX.<\/p>\n\n\n\n

It\u2019s a simple fact. Physical retail stores are going to struggle for survival  <\/strong><\/p>\n\n\n\n

It will be easy for us to blame what is happening to retail stores in Singapore for COVID-19, but the truth is, physical retail stores were already struggling to survive prior to the pandemic due to the rise of e-commerce. Despite the optimism that the government has for Singapore’s GDP growth in 3Q2021<\/a>, retail has been one of the worst-hit sectors in Singapore<\/a>, even behind the F&B sector which seems to get the lion’s share of attention when it comes to sectors that are struggling.<\/p>\n\n\n\n

Just like McDonald\u2019s is to fast food, Isetan Singapore is a good proxy when it comes to running a retail business in Singapore. The company is well-known and is seen as an established retail brand that has strong financial backing. Also, as a listed company on the SGX, Isetan Singapore’s financial numbers are made public.<\/p>\n\n\n\n

For example, in 2020, Isetan Singapore saw a total revenue of $77.1 million, down about 31% compared to 2019. While this comes as no surprise, what is interesting to note is that revenue was already trending downwards in previous years, even before the pandemic.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Source: <\/em>Isetan<\/em><\/a><\/p>\n\n\n\n

This is consistent with our observation that retail stores were already struggling to survive before the pandemic. The pandemic just quickens what may be an eventual death for some physical retail stores.<\/p>\n\n\n\n

This isn\u2019t to say that we think Isetan Singapore will be going under. In fact, with cash and cash equivalent of about $47 million as of 30 June 2021, the company will survive and may even stage a rebound in the future, but how many retail stores in Singapore have such financial firepower to survive the pandemic?<\/p>\n\n\n\n

E-commerce isn\u2019t the future; it\u2019s the present<\/strong><\/h3>\n\n\n\n

In its 2020 Annual Report Chairman Statement<\/a>, Isetan said that it experienced a surge in its online business during circuit breaker as more customers switched to e-commerce. Even after post circuit-breaker, the year-on-year increase in its online sales during FY2020 persisted, and this led to a four-fold increase in online sales for the year.<\/p>\n\n\n\n

For other smaller retail businesses that likewise offer an e-commerce solution, it\u2019s likely that they are also seeing a higher level of sales coming via online channels. This also means that retail businesses need to start increasing their focus and expertise in areas like digital marketing, user experiences and logistical capabilities, rather than just having nice storefronts in good (and expensive) locations.<\/p>\n\n\n\n

For smaller SME retail businesses, this is where grants like the E-Commerce Booster Package<\/a> will be vital to help them establish their online business in Singapore, and provide them with information and tools on how to get started. <\/p>\n\n\n\n

Traditional retail strategies like large-scale external sales may never return<\/strong><\/h3>\n\n\n\n

Remember the days where we frequently have large-scale expo events or pop-up sales located at the atrium of a shopping mall to attract a large crowd and to drive sales. Well, if you can\u2019t remember them, you are not the only one. For obvious social distancing reasons, these large-scale external sales events are currently not allowed. And one can argue, may never return even in the future.<\/p>\n\n\n\n

Rather, what is happening is that replacing these large-scale sales events are the never-ending online flash sales such as 7.7, 8.8, 9.9, 10.10, 11.11 and 12.12. Think of these online sales events as a hybrid between the Great Singapore Sales (GSS), and the random large-scale atrium pop-ups that we used to see at shopping malls.<\/p>\n\n\n\n

People still want to spend, but the action is now taking place in an entirely different dimension \u2013 on the internet, instead of shopping malls.<\/p>\n\n\n\n

Read Also: <\/strong><\/em>What We Can Learn From MOS Burger Temporarily Closing Down About 1\/5 Of Its Stores In Singapore<\/em><\/strong><\/a><\/p>\n\n\n\n

Top Image Credit: Uwe Schwarzbach<\/a><\/em><\/strong>. Used with appreciation<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"Retail is in very tough spot right now. \n","protected":false},"author":4,"featured_media":7773,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[364],"tags":[474,1135,1136,1137],"yoast_head":"\nIsetan To Close Its Parkway Parade Store: Do Retail Stores Have A Chance Of Surviving The Pandemic? | DollarsAndSense Business<\/title>\n<meta name=\"description\" content=\"Isetan closing its Parkway Parade store is a reminder of how difficult it is for retail businesses in Singapore\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/dollarsandsense.sg\/business\/isetan-to-close-its-parkway-parade-store-do-retail-stores-have-a-chance-of-surviving-the-pandemic\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Isetan To Close Its Parkway Parade Store: Do Retail Stores Have A Chance Of Surviving The Pandemic? 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