They’re giving up shop to collect rent

Source : Sunday Times - 15 Jun 2008

After 28 years, Wui Tai Departmental Store in Ang Mo Kio Central will call it a day at the end of this month.

The 1,600 sq ft samfoo garment shop, which caters to older women and men, started a closing-down sale three weeks ago.

Owner Gino Heng, who took over the shop from his parents five years ago, has decided to rent out the shop space instead.

‘Inflation is one of the main reasons,’ explained the 33-year-old.

‘Takings have been down because of increasing costs, so we prefer to collect a fixed rental for at least the next two years.’

He owns the shop space and has found a tenant whose lease starts from August at $15,000 a month.

Before the sale started, the store’s net profit had dropped by 20 per cent compared to the same period last year.

The average net profit a month last year was $9,000.

The store’s goods and manufacturing costs have increased by between 25 and 35 per cent, but retail prices have been adjusted upwards by only 10 per cent.

‘We have to consider the buying power of our customers,’ said MrHeng, explaining why he did not raise prices to match the increased production costs.

‘When times are bad, shops like ours which sell non-essentials are the first to be affected.

‘If customers already hold back when we don’t increase prices, it will be worse if we do.’

He added that it is hard giving up the business after so many years, but he feels ‘it’s time to quit’.

‘There’s no point holding on if there’re no better prospects in it,’ said the holder of a diploma in building and property management.

Mr Heng, who is single, has no fixed plans for his future yet.

‘I’m still young, so I can look for a job. It’s tough running your own business,’ he said.