IF the essentials of retailing were only location, location and location, then Lane Crawford's store in Singapore should have been a winner. Its distinctive glass cone of an entrance looks out across the junction of Orchard Road and Scotts Road, the two main shopping thoroughfares of the island. The dimension that worked against the store was time, or rather, timing. While the store's management has to shoulder a lot of blame for misreading how different the shopping preferences of Singapore were from those of its Hong Kong home market, it also found itself in the teeth of the toughest retail market in Singapore's recent history. 'Lane Crawford was not the first to go, and it won't be the last,' a retail analyst with broker Kay Hian James Capel said. Earlier this year just a few doors away from Lane Crawford, Galeries Lafayette gave up after years of trying to establish itself. That site will shortly be home to Planet Hollywood's latest Asian restaurant. Gaps have opened up along the Orchard Road shopping malls. Rumours of other big closures abound. Behind the dark outlook for retailers is a ruthless demand and supply equation. Over the past five years, retail sales have grown an average 3.5 per cent and slowing. Retail space grew 8.8 per cent. In the first six months of this year, 367,000 sq ft of new retail space came on stream, taking the total stock to 18.7 million sq ft. By the end of the year an estimated 1.8 million sq ft will have been added to the shopping malls and stores around the island. Some of that will be in the Orchard Road area, presenting more unwelcome competition to existing shopping centres, but the real rivals are the emerging suburban malls which have been built in the outlying townships. It is no longer necessary for shoppers to trek to Orchard Road. This has increased the dependence on the tourists, but the strength of the Singapore dollar has reduced the buying power of visitors. That same currency appreciation has made it much more attractive for Singapore citizens to save up their luxury shopping needs for overseas trips. The local dollars are being spent less freely because they are just not available. Singapore is a rich country, but much of the wealth is asset-based: the flat and the incredibly expensive cars. Analysts point out that marginal spending power for those who are repaying loans for both home and car is relatively low, so shopping sprees are out. While the market conditions are generally pretty grim, there are those who are doing more than surviving at both ends of the market. Giordano is reported to be making progress, although not at the same rate as in its new Asian markets. F.J. Benjamin, which specialises in well-known brand names ranging from Guess to Gucci, says Singapore is still a growth market, and plans to list its stock there. Getting the right products is - as ever - the key, and that is where Lane Crawford made its fundamental mistakes, according to market analysts. The best that many can say about Lane Crawford's product mix is that, for what was once a five-floor department store, it made a very good shoe shop. Footwear was the only line which really appealed to the consumers. As for the rest, Singapore shoppers were not prepared to pay Lane Crawford's prices for a label which had much less cachet than it commanded in Hong Kong. There is no shortage of the world's top fashion names in Singapore, and unlike the shop 'til they drop buyers of Hong Kong, to whom brand names are essential for everything, Singapore consumers are often happy to pay for a couple of good outfits, and then bargain hunt. Just how much Lane Crawford was struggling to find its niche in Singapore became clear in April last year when it renegotiated its contract with its landlord, Marco Polo Developments - a sister company under the Wheelock and Co banner - and reduced its floor space from five floors to two. It was not enough, and attempts to find the right product mix were unsuccessful, leading to a last-ditch attempt to keep a presence in the market by reducing its space to a single floor. This was ruled out on the advice of consultant Richard Ellis, which felt the landlord was still at risk from a default - despite the relationship between the two companies. For Marco Polo, the result may not be all bad news. It has lost a tenant, but can now look for ways of raising its rental income. The three floors vacated by Lane Crawford have all been leased as offices. A ground-floor tenant who would pay more in rent might be found, one analyst said, and pointed out that the hugely successful sale of the Ardmore Park residential redevelopment gave the company a deep cushion to soft-en the Lane Crawford pull-out. The Lane Crawford management will have to hope that Hong Kong shoppers never develop Singapore's more frugal habits.