Older malls losing shoppers, and shops

Orchard retailers moving to new sites with higher traffic

OLDER malls in Orchard Road are seeing smaller tenants jump ship because of the ever-changing flow of shoppers coursing through this prime area.

Smaller retailers at complexes such as The Heeren, The Centrepoint and Midpoint, say customers are more attracted to their shiny new neighbours Ion Orchard, 313@Somerset and the Mandarin Gallery.

At The Heeren, there are more than 20 boarded-up shop spaces and only about 60 tenants in operation. Business has halved in the past year for clothing store Mon Chavon, said its manager, Ms Wan Choy Kun. 'Sometimes, we get our first customer at 6pm. Then we hear them say the place is so empty they will not come here again.'

She hopes business will pick up when the mall's new anchor tenant, department store ALT, opens on Saturday.

Some businesses have seized the upper hand by migrating to the new malls, while others are closing down. In response, the managements of the malls are working to reinvent themselves.

The Heeren is one of them, but the revamp has come too late for designer shoe chain Limited Edt Vault, which moved out in April. Owner Mandeep Chopra opened two new outlets, at 313@Somerset and Marina Bay Sands (MBS), saying there were 'no walk-in customers at all' at the shop in The Heeren.

'The traffic has moved to the newer malls. It was a no-brainer to shut down the Heeren store and move elsewhere,' he said. The rental at 313@Somerset is similar to that at The Heeren, he added.

Ossia International, which manages brands like Camper and Springfield, pulled its Camper shoe store out of The Heeren in March, before its lease ended, and opened two outlets in Ion Orchard. Brand manager Pauline Sing said it left because of 'bad sales performance' with 'only about 10 walk-in customers a day'.

Down the road, at The Centrepoint, skincare chain L'Occitane moved out on June 24 and opened at MBS in the same month. Another tenant, handbag shop Furla, called it quits in May, after opening an outlet in Ion Orchard last year.

Men's clothing store Caserini will close down later this month when its lease ends, as it is in the red, said its spokesman. 'We were badly affected, especially when 313@Somerset opened.'

At Midpoint and Orchard Plaza, two of the older malls in Orchard Road, outlets such as Burger King, Midpoint Electronics and This Fashion have moved out in the past six months.

Not all malls have seen their tenants bail, however, with Ngee Ann City and Paragon and their higher-end tenant mix relatively unfazed.

And long-time stalwarts such as Robinsons at The Centrepoint are still packing them in. Robinson Group spokesman Donna Chua said it had 'no plans to move out of The Centrepoint'.

'We are fortunate to have a strong customer base, many of them long-standing and loyal customers,' she said.

The Centrepoint is working on 'improving tenant mix and introducing new concepts' to pull in more shoppers, said Frasers Centrepoint Malls general manager Wendy Low.

This includes a basement foodcourt which features new dishes such as crab roe dumplings from Shanghai, she added.

Acknowledging the recent departures at The Heeren, a spokesman for Swee Cheng Management, which manages the mall, said it is currently 'repositioning to focus on a new target market of the young and sophisticated professionals, managers, executives and businessmen crowd'.

ALT is an exclusive new entrant which will occupy three levels of prime space in the mall, he added.

About 1.5 million sq ft of lettable retail space was added to Orchard Road in the past year, said Orchard Road Business Association chairman May Sng, an increase of 25 per cent.

'In such a situation, there will definitely be cannibalisation,' she said.

Singapore Retailers Association president Jannie Tay said a ready supply of retail space has led to business owners being able to pick and choose.

'At the moment it's a retailers' market. They have more choice now and will get out of unprofitable places,' said Ms Tay, who suggested landlords reduce rents to make their malls more attractive to retailers or offer other incentives.

Old or new, Orchard Road malls also face competition from big suburban malls. Estate agents say they are drawing more shoppers, which consequently drives up rents at the more popular malls in the suburbs.

Source: Straits Times, 6 Jul 2010