Orchard Road, lights out?
Is Orchard Road, long synonymous with S'pore retail and known globally as a shopping hub, losing its shine?
It is after work on Thursday and shoppers should be streaming in to malls like The Centrepoint and 313@Somerset.
But it was a quiet evening.
Orchard Road is set to reveal a new look with $40 million worth of refurbishment and enhancement to infrastructure.
But an article in the Japanese publication Nikkei Asian Review last month said Orchard Road is struggling.
In a Straits Times report in March, Metro Holdings, which opened a new department store in The Centrepoint in the final quarter of last year, said a "disappointing level of sales resulted in losses being incurred by the new store".
In the same report, department store operator Isetan Singapore had earlier reported a net loss of $3.1 million for the year ended Dec 31 on the back of higher rents and slower sales.
So, stores have closed and Orchard Gateway, one of the newest malls in the area, is struggling to gain traction with customers despite opening to much fanfare only a year ago.
What happened?
Experts offer many reasons. Among them, online shopping and the habits of the smartphone generation.
Take business school student Peter Lim, 22, who is graduating this year and joining the workforce soon.
Wanting to make an impression, he has been eyeing a pair of Oxfords since April.
So he popped into a retailer at Ngee Ann City last month to suss out the shoes, confirm his size and yes, the price.
"I wanted to see if the shoes look nice on me. Having tried them on at the store, I thought they looked really good on my feet but I didn't want to spend more than $200," he tells The New Paper on Sunday.
The shoes cost $269.
He walked out, saying he would "think about it" but then went online and bought the same pair for about $160 - a savings of about $110.
Apart from shoes, Mr Lim buys his clothes, magazines and books online.
"It is more convenient. I don't have to deal with parking, transport or jostling with hordes of people," he says.
Perfumes such as Giorgio Armani Code Luna Eau Sensuelle Eau De Toilette for women costs $50 less online than at the store.
Even branded bags and dresses can go for between 15 and 50 per cent less online compared to prices at brick-and-mortar shops.
A confluence of easy access to the Internet, broadband speeds and smart devices have contributed to fewer people shopping at Orchard Road.
Last year, online spending here exceeded $1 billion. It was up 13 per cent year on year, based on data from market research firm Euromonitor International.
That is only a fraction of the whopping $30 billion in total store-based sales here last year.
But here is the catch - store-based sales have been flat.
SHUTTERED
The TNPS team visited 21 malls along Singapore's famed retail strip in the middle of the day over the last two weeks.
There were few shoppers within the malls and some of the shops were even shuttered, while others were undergoing renovation for new tenants.
Some experts say the stretch is crowded with malls, many with repeat brands.
For instance, there are four Zara stores along the 2.2km stretch of Orchard Road from Liat Towers to 313@Somerset.
With three new mega malls added since 2009, another 1.8 million sq ft of new retail space had been added, making it 8 million sq ft of retail space available along Orchard Road.
This is equivalent to about 103 football fields.
With competition from the Internet and "cannibalism" within the physical realm, Orchard Road will need to keep reinventing itself to keep its spot as one of the world's most popular shopping enclaves.
- Additional reporting by Khairiyah Amirah Md Ramthan
Narrowing focus to get bigger slice of pie
To stay relevant, some malls have turned to specialisation, targeting niche markets.
While Far East Shopping Centre caters to golfers with speciality shops occupying the second storey, its sister mall, Far East Plaza, tries to attract the trendy, the young and the young-at-heart with small independent clothes and shoe shops.
Others too have become more focused:
PHOTO: BH FILE
*SCAPE
Its tenants are youth-centric and the prices are kept affordable.
"We have increased the percentage of food and beverage offerings and entertainment retailers to cater to youth interests.
"Key tenants include Astons, Sakae Sushi, Playnation and K Box. Trapped, an escape reality game outlet, is our latest addition," its spokesman Daniel C. Lim says.
PHOTO: ST FILE
PALAIS RENAISSANCE
It caters to a niche clientele.
"Known for exclusive tenants such as Passion Hair Salon, Steinway Gallery and Mouawad, Palais Renaissance stands apart from other malls in the Orchard Road shopping belt as it provides a rare combination of exclusive brand offerings, in a luxurious ambience," says a senior vice-president (leasing) at City Developments.
PHOTO: ST FILE
MANDARIN GALLERY
It brings in some brands that can be found nowhere else in Singapore.
OUE Retail Property Management spokesman Patrina Tan says: "About 35 per cent of the retail brands or food and beverage concepts located in Mandarin Gallery are the only stores in Singapore."
"These include Y-3, E'Collezione, Bathing Ape, Inhabit - The Other Store, Hansel, The Denim Store, Atomi X Lifestyle & Furniture, Hashida Sushi, Sasha & Sons and Arteastiq," she says.
Closures 'natural' in retail industry, says property developer
TNP PHOTO: ARIFFIN JAMAR
Footfall and business have been poor at some malls, with businesses reporting low sales on weekdays.
The New Paper on Sunday team visited 21 malls in Orchard Road in the middle of the day over two weeks.
There were few shoppers - The Centrepoint (pictured), 313@Somerset and Orchard Gateway, in particular, had almost no shoppers when we visited.
It is a pattern seen throughout Orchard Road, and it is taking a toll on business.
Shaw Centre, for one, has about 30 shops shuttered out of its 80 spaces.
Far East Plaza and Lucky Plaza both had about 100 shops shuttered out of the 480 and 700 shops respectively.
Out of the nearly 3,000 shops and services at the 21 malls TNPS visited, 430 or about 15 per cent were closed.
But some developers - like SPH Reit, Frasers Centrepoint and Far East Organisation - say the spaces are closed for renovation as new shops are moving in.
TNPS visited The Centrepoint and 313@Somerset from 5 to 7pm on Thursday.
PACING
Staff at several stores were fiddling with their smartphones or pacing because there were hardly any shoppers.
The more diligent staff were endlessly arranging merchandise and cleaning the displays.
At The Centrepoint, Anne Kelly's store manager, who wanted to be known only as May, said she does not get walk-in customers, only regulars.
The boutique clothes shop owner said: "I sometimes have no customers for three out of the seven days in a week."
When we asked her about the situation, she said: "Customers just aren't coming. Look at how many shops have already moved out."
Miss Averil Lin, 22, a sales assistant at Omayo for the past three months, was arranging clothes and wiping the shelves for about an hour from 5pm.
Nobody visited the children's fashion store at The Centrepoint when we were there on Thursday from 5 to 6pm.
Miss Lin says the shop is usually busiest over weekend afternoons.
"Even though there are no customers, it doesn't mean I don't have to work. But without people, there is not much else I can do," she said.
Assistant director of retail business group at Far East Organization Eric Tong explains that shops closing or leaving are "natural expiries in the retail market, as in all sectors".
He says the group is, in anticipation of retail trends and changes in consumer taste, planning for the reconfiguration and remixing of some of these spaces to bring in new concepts and improve circulation.
The group recently transformed the upper levels of Orchard Central to offer shoppers an array of restaurants, cafes and food outlets.
Mr Tong says human traffic is high at the basement and ground levels of malls with direct access to MRT stations.
"Footfall at Orchard Central has increased with the improved connectivity between 313@Somerset, Orchard Gateway and Orchard Central, coupled with our own promotions.
"We have also received positive feedback from tenants and shoppers about our marketing programmes."
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