Retailers around new store feeling the heat

Less than a month since Ion's opening, retailers in the surrounding area are feeling the heat.

Chain store U.R.S. & Inc used to sell up to 100 pairs of shoes a week at its Ngee Ann City outlet, but these days, it only manages an average of 40.

'Our sales have definitely been affected quite a bit especially at this branch because it is closest to Ion,' said its operations manager Richard Goh. The homegrown shoe label has 10 outlets.

Out of 20 department stores and retailers surveyed by The Sunday Times, 14 said they have seen a drop in customer traffic and sales.

At Tangs Orchard, which is linked to Orchard MRT Station by an underpass, shopper traffic has dipped by 10 per cent.

'Naturally, there has been a drop in numbers into our store, especially from our basement entrance, because of the new Ion Orchard,' said Ms Lin Pei Hua, assistant vice-president of marketing and communications.

But two weekends of promotions and a celebrity appearance by Malaysian actress-singer Lee Sinjie have kept sales up, she said.

Orchard Road Business Association chairman Sng Ngoi May said an initial dip is expected, due to the novelty of a new mall and also Ion's prime location above Orchard MRT Station.

While Wisma Atria and Wheelock Place, both connected to Ion by underpasses, have seen a surge in shopper traffic, that has not necessarily translated into better sales for their shops.

Wisma said shopper traffic went up by 60 per cent in June and last month after a basement linkway to the train station reopened and Ion was launched on July 21.

Still, some retailers at Wisma said sales dipped by between 10 and 50 per cent in Ion's first week.

Over at Wheelock, a new underpass that links to Ion and the closure of a street-level pedestrian crossing at Paterson Road have also brought in the crowds. But retailers say many shoppers are merely entering the mall to get to Ion.

'Business will definitely be affected to a certain extent by the hype and excitement surrounding the new malls,' said a spokesman for Japanese eatery Sakae Sushi, who would only say that there was a slight impact on its business but declined to give numbers.

Even those farther down the road from Ion have not been spared.

Mr Ben Lee, marketing brand strategist for clothing company New Urban Male, said sales at its Heeren shops plunged 40 per cent in the first week Ion opened.

The brand also has a concept store in Ion, which he says is 'meeting our target, but people are checking out the mall more than they are seriously shopping'.

Despite retailers' worries, Mrs Sng said it is too early to assess Ion's impact on other malls.

Retail consultant Lynda Wee said that with the opening of new malls like Ion, Orchard Central and 313@Somerset, Orchard Road will become the shopping street of Asia.

'We have an entire street of malls that are integrated and stand side by side; something Bangkok, Kuala Lumpur and even Hong Kong do not have,' she said.

She expects the street to bring an influx of tourists, who will shop at not only the new malls but also the older ones.

'But the older malls need to revamp and reinvent themselves. Shoppers will skip them if they look tired and dated,' she added.

Source: Sunday Times, 16 Aug 2009