Metro, Isetan setting up new heartland outlets

Source : Straits Times – 31 Jul 2009

RETAIL veterans Isetan and Metro will expand in the coming year, at a time when many of their counterparts around the world are biting the dust.

The two department stores, each with three outlets, are setting up new outlets in the heartland – after years of standing pat.

Japanese chain store Isetan will open its first outlet in 14 years at Nex, an upcoming mall in Serangoon Central, next year. Locally owned Metro will have a 56,000 sq ft outlet in City Square, the mall in Little India, by September – this coming after it closed two stores in the last four years.

The moves fly in the face of what is happening elsewhere, where department stores are doing anything but expanding. The recession has already felled the weaker players in the United States, Japan and parts of western Europe.

American chains that have gone belly up include Gottschalks and Mervyn’s, while premium stores like Saks and Neiman Marcus are offering more lower-priced products to reel in the crowds, noted Australia-based retail consultant Michael Baker.

In Japan, chains like Mitsukoshi and Daimaru have downsized or merged with others on the back of a three-year decline in takings.

Here, names like Sogo and Seiyu, big in the 1990s, are now a distant memory for a new generation of shoppers. In its heyday in the 1980s, Metro had eight outlets, five in Orchard Road alone. Today, it has only one outlet on the strip, with the other two in Woodlands and Sengkang.

Singapore Retailers Association executive director Lau Chuen Wei noted that department stores are no longer considered the must-have anchor tenant. The newest temples to shopping – 313@Somerset, Ion Orchard, Orchard Central and Tampines 1 – either have supermarkets or flagship stores of well-known brands to draw crowds. Shoppers have also changed their habits, said Mr Baker. They find browsing in department stores too inconvenient and prefer patronising speciality stores.

Department stores are also facing competition from hypermarkets and fast-fashion brands muscling in on their ‘one-stop shop’ concept. Carrefour, for example, has gone beyond foodstuff and household sundries to sports equipment, clothing and make-up, while clothing brands like Zara now also stock shoes, accessories and bags.

To survive, therefore, the department stores are staking a claim on heartland turf.

Metro is doing one other thing – tweaking its offerings to attract younger shoppers: It will bring in new cosmetic brands, create a special Estee Lauder beauty treatment room and introduce the first Barbie shop here, modelled after the one in Shanghai.

But some young consumers like civil servant Prashant Somosundram, 29, say department stores need to reinvent themselves, not just tweak their formula. He lives across from City Square mall, and hopes the Metro outlet there will ‘bring in unique fashion labels or food products’. He also suggested that stores create a unique shopping experience with interactive digital media.