You are here

RETAIL UNDER STRESS

Tough times to shutter Robinsons' Jem outlet

BT_20200507_LTROBINSONS_4110935.jpg
The Robinsons outlet in Jem in Jurong East opened in 2013 and occupies 85,000 sq ft spread over four floors. Its closure will leave Robinsons with outlets at The Heeren and Raffles City Shopping Centre.

Singapore

ROBINSONS Singapore is shutting its Jurong outlet, in a further sign that the department store model may be increasingly untenable.

The department store with a 162-year history - which in recent years has been trimming its physical footprint - announced on Wednesday that it is ceasing operations at its outlet in Jem, the suburban mall in Jurong East, by the end of August, following discussions that started with its landlord Lendlease last November.

The Jem outlet opened in 2013, the same year the mall did, occupying four floors totalling 85,000 sq ft. Its closure will leave Robinsons with two outlets, at The Heeren and Raffles City Shopping Centre.

However, the company plans to revamp its e-commerce capabilities. Last month, it launched its digital store on Lazada's LazMall platform.

Your feedback is important to us

Tell us what you think. Email us at btuserfeedback@sph.com.sg

Some of its employees - Robinsons declined to say how many - will be transferred to the other Robinsons outlets and retail brands under Robinsons' parent Al-Futtaim Group, such as Marks & Spencer, Zara and Massimo Dutti. The rest will be helped to secure new employment within Jem.

Robinsons' decision comes amid stiff competition and disruption in Singapore's retail scene, although the impact of the novel coronavirus outbreak may have also forced its hand.

The department store operator told The Business Times that competition from the rapid increase in suburban malls had made having multiple, large-scale department stores in Singapore unsustainable "well before" the virus pandemic surfaced.

Even so, "the challenges we are facing with the ongoing Covid-19 situation are extremely difficult and the uncertainty is very unsettling for all".

But Robinsons added that its management is "committed to ensuring viable and successful operations in Singapore" and is grateful for the support it has received from its Jem customers over the years.

Robinsons' heritage dates back to 1858, when John Spicer and Philip Robinson founded Spicer and Robinson, a family warehouse at Commercial Square (the present-day Raffles Place).

In 2008, the Al-Futtaim Group took over the reins of the group of stores and attempted expansion, starting with a store at Marina Bay Sands in 2011, and then the outlet at Jem, and its 186,000 sq ft flagship at The Heeren in 2013. At one point, Robinsons was said to be in talks to lease the former Borders space at Wheelock Place.

The Marina Bay Sands store closed within two years. Robinsons also moved out of The Centrepoint - where it had been for 31 years - when its lease expired in 2014.

Other department stores in Singapore have also trimmed operations in some way. Last year, Isetan closed its loss-making outlet at Westgate mall; Metro exited The Centrepoint after five years as the mall's anchor tenant.

In 2016, John Little, also been managed by the Al-Futtaim Group, closed its last outlet in Singapore.

Market watchers said department stores have had their edge eroded over the years by specialist retailers and e-commerce, despite their best efforts to keep up. The Covid-19 outbreak simply sped up their demise.

Kapil Tuli, professor of marketing at the Singapore Management University, noted that American department stores like Macy's and Neiman Marcus have been hit by the rise of specialist retailers and e-commerce.

Department stores were supposed to be a "curated mini-mall" and one-stop shop for consumers, but consumers can now get that convenience online, where they also enjoy access to more appealing brands, Dr Tuli said.

Megan Ong, director at Nanyang Polytechnic's Singapore Institute of Retail Studies, said that department stores' large spaces and many employees also pose high overhead costs.

She said department stores' key to survival will hinge on their ability to integrate online and physical retail, as some players in China have done.

This will require the engagement and understanding of consumers, beyond just setting up an online website.

Robinsons' move onto LazMall is a good one because it may be able to benefit from Lazada's e-commerce strengths and consumer traffic, she said.

On the other hand, Dr Tuli is unsure about whether department stores will be able to translate the physical shopping experience and service, for which they are supposed to be known, to the online platform.

For now, Robinsons appears to be trying to combine the best of both worlds. It said: "We pride ourselves in being a premium brand, and with that comes premium service. The brick-and-mortar store allows us to express this premium service in a way that the digital store cannot. Offline to online is a concept we easily grasp, and we believe offline and online work better, together."

BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes