Sales pinch prompts Lane Crawford cuts
HONG Kong's Lane Crawford has become the first retailer in Singapore to respond to poor market conditions by cutting back its interests there.
The company is closing the top three floors of its Singapore retail operation because of poor sales.
'The start-up operation of Lane Crawford Singapore has been directly affected by the vast over-supply of retail space resulting in very stiff competition,' said W J Lee, chairman of Lane Crawford International.
The 161,600 sq ft which Lane Crawford is giving up will probably be converted into offices, according to Marco Polo Developments, owner of the Lane Crawford building.
In addition to closing its top three floors, Lane Crawford International also will be letting out more of its remaining 42,400 sq ft in space to concessionaires.
The shut-down comes against the background of a poorly performing retail sector in Singapore.
Earlier this year the manager of Takashimya, a new, popular Japanese department store in Orchard Road, said he expected his store to become profitable sometime in the next decade.
Singapore analysts blame poor retail performance on over-building in the Orchard Road area and changing shopping habits.
'People are now shopping more at suburban shopping malls closer to their homes,' said a Singpore property analyst.
Some analysts also attribute Lane Crawford's poor performance to its expensive merchandise.
In contrast to the empty sales floors in the Lane Crawford Building, business at the basement Marks & Spencer is thriving.
While designer suits at Lane Crawford sell for upwards of S$500 (about HK$2,750 dollars), at Marks & Spencer most of the store's St Michael-brand clothes sell for S$50 to S$150 per piece.
Lane Crawford, however, will continue to target the luxury goods sector of the retail market, according to Elaine Bygrave, Lane Crawford Singapore's general manager.
Marco Polo Developments may have to spend as much as S$4 million to convert the store space to office space.