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Isetan's FY15 losses balloons to S$25.8m
WEAKER economic sentiment has caused departmental store Isetan in Singapore to widen its net losses by 723.5 per cent to S$25.8 million for the full year ended Dec 31, 2015.
Slower sales and conversion of its Orchard outlet were cited as reasons for the loss.
The group had a revenue of S$302 million last year, 11.2 per cent lower than in 2014.
"We expect consumer sentiment to be negatively affected by the general concerns regarding the health of the local and global economies. With the retail industry being sensitive to external environmental factors, the single digit GDP growth rate of 1 per cent to 3 per cent forecasted for the Singapore economy in 2016 is unlikely to provide considerable uplift to consumer demand," Isetan said in its financial report on Monday.
It also noted that the retail environment here is "highly competitive".
Isetan Orchard was closed in March last year to make preparations for its conversion into rental area. It only started to do so in the third quarter last year, "and was unable to reap the full benefits of this change."
The group had also incurred a loss of about S$9.2 million from the impairment of property, plant and equipment.
Higher rental expense at Isetan Scotts continued to impact the store and was also a major reason for the overall increase in rental expense, the group said.
Isetan is hoping that the newly converted Orchard outlet will be able to pull in more revenue for this year as it has succeeded in securing more tenants.
"For the stores that have not done well in 2015, the group is studying turnaround plans that can be put in place to improve their performance moving forward," it said.
A final dividend of 5.0 Singapore cents a share was proposed, down from last year's 7.5 Singapore cents.