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Decline of Singapore's famed shopping strip shows city's pain

Orchard Road - July 25 - Bloomberg.jpg
The downturn has hit luxury and bargain-basement retailers equally hard. Robert Chua, who runs a discount luggage store, reckons he can last about another two months.

[SINGAPORE] A walk down Orchard Road shows just how badly the coronavirus pandemic has hit Singapore's famed shopping strip.

Gone are popular restaurants like Modesto's, which shut last month after 23 years. Also missing are the queues of Chinese tourists outside Chanel and Louis Vuitton. Malls along the 2.4 kilometre stretch, once one of Asia's top shopping meccas, are dotted with empty stores. On a recent midweek afternoon, the number of shop staff idly dusting shelves or playing with their mobile phones rather than greeting customers is notable.

"It's the worst crisis for Singapore and Orchard Road," said Kiran Assodani, who has run her custom tailor shop in one of the older malls for 35 years. The alterations outlet, which caters to both tourists and locals, has seen sales drop by 90 per cent since the virus outbreak. "I don't know if the shops can weather this storm."

Orchard Road's malaise is a microcosm of the city-state's pain. After initial success in containing Covid-19, an outbreak swept through scores of dormitories housing foreign workers, prompting a two-month partial lockdown that's sending the economy toward its worst-ever recession. Global travel restrictions are robbing Singapore of around US$20 billion in tourism receipts and the domestic market is too small to make up the shortfall.

Originally the site of fruit, nutmeg and pepper farms in the early 19th century that gave the strip its name, Orchard Road's transformation into a glitzy shopping hub - the first department store opened in 1958 - mirrored Singapore's own growth from a relatively sleepy trading outpost to one of the world's wealthiest nations.

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Now, it's tracing the economy's decline.

Italian restaurant Modesto's survived the Sars outbreak and the Asian and global financial crises during its more than two decades on Orchard Road, but buckled under the coronavirus. Instead of renewing his lease, owner Ashok Melwani decided to cut his losses and close for good.

"If I renewed, I was signing up for a rollercoaster in the dark," said the 62-year-old, who also closed a second Modesto's outlet nearby. "I may bleed and bleed with no end in sight."

The downturn has hit luxury and bargain-basement retailers equally hard.

Robert Chua, who runs a discount luggage store in Far East Plaza, reckons he can last about another two months. He used to take in around S$25,000 a month selling suitcases and backpacks to mostly American, European and Chinese tourists. Now, a S$300 day is a good one, and some days there are no customers at all.

"Everyday I come to the store feeling sad," said the 50-year-old. Inside his account books he keeps three S$50 notes - a Chinese superstition meant to keep money flowing in, to no avail. "I can't sleep thinking about the expenses I have to pay." His S$6,000-a-month rent resumes this month after rental rebates provided by the government and some landlords ended in July.

At least 20 stores in Far East Plaza, which is part owned by the billionaire family behind RB Capital, are empty, "For Rent" stickers optimistically plastered on their shutters.

A few blocks away at the more upmarket Ngee Ann City, part of Starhill Global Reit's portfolio, it's a similar story. Several shops are closed, including a Japanese restaurant and linen-fashion retailer British India.

"It's never been this bad and I've been working in retail since 1994," said Nana Sahamat, the manager of Japanese clothing store Fray I.D. "Before the crisis, I'd be busy entertaining customers but I now spend more time in the backroom doing stock taking."

To be sure, Orchard Road was already losing its lustre before the coronavirus hit. The Shoppes at Marina Bay Sands has drawn away wealthy tourists and domestic consumers alike with luxury retailers like Christian Louboutin, Fendi and Gucci, and fine dining restaurants such as Cut by Wolfgang Puck.

More cost-conscious shoppers meanwhile are heading to suburban malls flush with high-street brands like Uniqlo, Zara and Topshop, and no longer see the need to venture to Orchard Road.

"Before the pandemic, Orchard Road had already seen a decline in foot traffic and sales," said Wong King Yin, a lecturer in marketing at Singapore's Nanyang Technological University.

"Only when international tourism has fully resumed, the economy has recovered and everyone is willing to spend, and when Orchard Road is able to offer unique experiences more than just shopping, then the district can attract people like it did during its peak," she said.

There have been repeated attempts to rejuvenate the area. CapitaLand's futuristic Ion Orchard mall was opened in 2009 and shoppers can get everything they need - from luxury jewelry and fashion to affordable brands like Swarovski. There's also a huge basement food court showcasing fast food and Singapore street delicacies. The strip has also dabbled in midnight shopping, monthly pedestrian nights, and a S$40 million makeover to widen sidewalks.

"The experiences introduced still aren't able to 'wow' consumers," Mr Wong said.

Last year, the government unveiled fresh plans to transform Orchard Road into a "lifestyle destination". It's envisaged the strip will be divided into four precincts each with its own focus, such as arts and culture, a youth hub and a garden district.

"Like many other cities, Singapore is studying possible changes in consumer behavior and the impact of the pandemic on our urban development plans," the Singapore Tourism Board and Urban Redevelopment Authority said in an emailed response to Bloomberg questions. "Where appropriate, we will look at adjusting and fine tuning specific plans."

For restaurant owner Melwani, it's all a little too late.

"Orchard Road definitely has its charms, but I fear the ship has sailed," he said. "I honestly don't know what can bring back the glamor."

BLOOMBERG

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