It might be recession time, but luxury brand Cartier is sparing no effort in dressing up its swanky new duplex at the corner of Scotts and Orchard roads in new mall ION Orchard.
Set to open next month, Cartier has sunk more than $8 million into the two-storey store, which comes with a glass facade with a gold inlay, two VIP rooms and a lift fitted with beige leather.
‘ION is on a very important intersection and our store will face the intersection, making it very accessible,’ said an excited Mr Christopher Kilaniotis, its managing director for Singapore, Malaysia, Indonesia and Australia.
Just a few blocks down the road, however, the mood is far less cheery for some tenants.
Mr Jeffrey Liew, 48, who runs camera shop Letona Departmental Store, at Orchard Plaza, has seen his business plummet by 60 per cent to 70 per cent over the years as more electronics shops have moved into surrounding areas.
‘We’re been here for about 20 years. The more shops come up, the more business has dropped. There are too many shopping centres here now,’ he lamented.
These are the two faces of Orchard Road retailers today, even as the shopping strip gears up for its biggest retail boost in a decade – the opening of ION Orchard and soft opening of Orchard Central next month.
Along with 313@Somerset, opening in November, the big malls will add about 625 shops and some 1.1 million sq ft of retail space to the 2km-long shopping belt. A revamped Mandarin Gallery is also opening in October with 130,000 sq ft in net lettable area.
Orchard Road already boasts about 4.5 million sq ft of retail space, according to property consultancy Knight Frank’s figures.
That makes up 21 per cent of all private retail space on the whole island, said DTZ’s senior director for research Chua Chor Hoon.
‘There are too many shops in Orchard Road. I can already get what I want from my neighbourhood malls. I don’t see the purpose of building the three new malls,’ said shopper Siti Aisha, 20, a nurse.
Has Singapore’s famous shopping district become too crowded?
Ms Regina Chow, part-time lecturer of services marketing at the National University of Singapore’s Business School, believes so, and not just in Orchard Road alone.
‘Currently, we are over-retailed for the population we’ve got. With new malls along Orchard Road and the upcoming integrated resort retail hub, there will be more retailers out there than before,’ she said.
However, some analysts said that foreigners also keep the market buoyant.
Said Dr Seshan Ramaswami, practice associate professor of marketing at Singapore Management University: ‘The one big difference in Singapore is the big influx of foreigners here for short-term visits for tourism and business. And city malls at least need to cater to both the locals and the tourists.’
But even those who cater to foreigners feel the heat too.
Mr George Assodani, 50, owner of Solito Fashions tailor at Far East Plaza, said: ‘Even though I depend on tourism for my business, the recession has made them spend less. And with new malls coming up, business will definitely be affected. Our future is a big question mark.’
Numbers, however, sing a different tune about the big picture.
Figures from property consultancy CB Richard Ellis show that Singapore had 7.2 sq ft of retail space per capita as of last year. This is lower than other countries like South Korea, which has almost 15 sq ft per capita of retail space, and the United States with over 35 sq ft per capita as of June last year.
The bigger gripe, perhaps, is not that Singapore has too many malls, but that it has too many of the same thing. ‘All malls seem to have the same range of shops: Topshops, Hang Tens, Giordanos,’ said polytechnic student Poobalan Arasu, 18.
Dr Prem Shamdasani, associate professor of marketing at the NUS Business School, pointed out: ‘The challenge is not more space or malls but how to differentiate and constantly rejuvenate the shopping experience for both locals and tourists.’
But Dr Lynda Wee, chief executive officer of retail consultancy and training firm Bootstrap, added that it is hard to maintain such a mix. ‘People in Singapore may be bored because of a lack of variety but it’s hard to bring in new labels that have staying power. That is why malls tend to stick to tried and tested brands,’ she said.
On Orchard Road at least, the three upcoming malls will rejuvenate the stretch, since the last major new development there was a decade ago, said analysts.
One retailer is hoping that the new malls will give her business a much-needed push. Madam Irene Ong, owner of Pretty Corner, an accessory shop in Orchard Plaza, said: ‘This building currently doesn’t draw any crowd but I hope Orchard Central will generate more traffic and bring more people to my shop.’
And at least one retailer is optimistic that her business will not be hard hit by her new neighbours.
Ms Nancy Law, 46, director of Purple Beads beads shop and beading school in Midpoint Orchard, said: ‘This building is pretty quiet. We don’t get any walk-in customers. But we do have regulars, so I’m not worried the new malls will affect me.’
4.5 million Estimated number of square feet of retail space in Orchard Road
5.8 million Number of square feet of retail space expected to be added to Singapore between this year and 2013
3 Number of new malls opening in Orchard Road between July and December
1.1 million Number of square feet of retail space at the three new malls
2 Length of Orchard Road in km
800 Estimated number of F&B outlets in Orchard Road
7.2 Number of square feet of retail space per capita as of last year
15 Number of square feet of retail space per capita in South Korea as of last year
14 Number of square feet of retail space per capita in Hong Kong as of last year
21% Amount of Singapore’s total private retail space concentrated in Orchard Road
39% Amount of Singapore’s private retail space in other city areas
40% Amount of Singapore’s private retail space in suburban areas
Source: Straits Times, 7 Jun 2009