Luxury retailers still expanding here

Source : Straits Times – 11 Aug 2009

WITH consumers hesitant to spend, and visitor arrivals dwindling, it is no surprise that retail sales have been on a downward slide in recent months.

But a stroll down Orchard Road reveals one segment of the industry that still shines: luxury retail.

Despite the recession, luxury developers and retailers here have not put the brakes on their glittery expansions.

The next high-end development on its way is Knightsbridge, an 83,000sqft, four-storey retail podium connected to Park Hotel Orchard and scheduled to open in May next year.

Unveiled last month, Knightsbridge will house its eight to 10 luxe tenants in double-storey flagship units.

The developer, Park Hotel Group, has secured 50per cent tenancy and says it is confident of opening with a full house next year.

It joins two other upcoming or newly completed projects on the strip, in proximity to the existing temples of luxury, Palais Renaissance, Paragon and Ngee Ann City.

Just opposite Knightsbridge is the 190,000sqft Mandarin Gallery, expected to host the likes of Emporio Armani and Mont Blanc when it opens in October.

Up the road, crowds continue to throng the Louis Vuitton and Cartier outlets at the month-old Ion Orchard.

Luxe industry players are confident the industry will remain buoyant here, pointing to a continuing demand for such goods in the Asian region.

They also cater to a segment which has been less buffeted by a turn of fortunes.

‘The luxury market is less volatile than the mass market in a downturn. Those who immediately feel the pinch are the mid-income groups, but high-income earners don’t really drop their spending,’ said Mr Allen Law, group director of Park Hotel Group.

A spokesman for Club 21, which is opening five stores in Ion Orchard and three in Mandarin Gallery, noted that there is still room for Singapore’s growth as a financial and fashion capital.

They may have reason to be confident. Market research by UM Consulting has found that the performance of the luxury goods sector has steadily increased every quarter since last year.

It estimates spending in that sector to be $369.3million for the first quarter of this year, compared to $289.1million in the same period last year.

There is a steady hunger for bags and bling among Asians, who make up the bulk of visitors to Singapore.

‘Developing countries like Indonesia and India are seeing their appetites being sustained, even increasing,’ observes UM Consulting analyst Ramesh Brahmadathan.

Asia has been a focus for luxury brands’ expansions.

Worldwide, they have taken a beating: the world’s biggest luxury house LVMH, which owns top brands like Louis Vuitton, Givenchy and Tag Heuer, saw a 12per cent drop in its first-half operating earnings.

In stark contrast to luxe’s ascent, there have been signs that the mid-tier market here may be flagging.

It was estimated to be worth $1.65billion in the first quarter of this year, dropping from $2.14billion in the quarter before that.

Mr Law predicted: ‘The luxury sector will still grow, and it will grow faster than the rest of the market.’

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A LESS VOLATILE MARKET

‘The luxury market is less volatile than the mass market in a downturn. Those who immediately feel the pinch are the mid-income groups, but high-income earners don’t drop their spending.’- Mr Allen Law, group director of Park Hotel Group

Prada steps up retail pace here

Source : Sunday Times – 26 Jul 2009

It is hard to miss the gold-and-green damask facade of the Miu Miu store in brand new mall Ion Orchard.

Its towering glass panes contain a 2,800 sq ft interior, and scream ‘come in and buy something, especially an exclusive snakeskin bag that bears a ‘Miu Miu Singapore Limited Edition’ label’.

And that is exactly the intention of the Prada group, which is planning to open at least three Miu Miu standalone stores by the end of next year, including one with a three-storey facade in Paragon Shopping Centre.

Said the group’s newly appointed chief operating officer, Mr Sebastian Suhl: ‘We’re in advanced discussions with the Marina Bay Sands integrated resort (for another store) and we’re opening in Changi Terminal 2 by early 2010.

‘With the current developments making Singapore a very dynamic place, I’m sure this won’t be the end of it,’ he added.

Speaking to The Sunday Times in the freshly unveiled boutique last Tuesday, Mr Suhl said the group is focusing its expansion plans on Asia because ‘the numbers clearly demonstrate that Asia is booming’.

He declined to give specific figures, but said this year’s growth – in the double digits – remains ‘very strong and similar to last year’s, which is impressive considering the downturn’.

Asked why Prada is so bullish on Singapore, he said: ‘Singapore is a large market for us, numbers-wise. With all these new developments coming up, it will draw a lot of shoppers from the surrounding countries.

‘Singapore is going to give Hong Kong a run for its money, as a tourist market, a retail market and a luxury market. It’s a very refined place and it’s among the top markets here for us.’

To demonstrate its commitment to this belief, the group also made sure the new Miu Miu store here was among the first in the world – ahead of Hong Kong, even – to stock some of the season’s latest merchandise.

The group will also open a 14,000 sq ft Prada store in Ion in September. The double-storey boutique, which will feature a unique facade design and face Orchard Road, will be the largest Prada store in all of Asia – until the 18,000 sq ft one opens in Plaza 66 in Shanghai by the end of the year.

In fact, Ion Orchard represents a milestone of sorts for the group, as the mall is where it will also launch its other two brands, Car Shoe and Church’s, which are new to this market.

‘It’s rare for us to open all four brands in one mall at once,’ said Mr Suhl, who attributed some of this aggression to the recession.

‘Recessions present opportunities for those who have a vision and who have money to invest. For the Prada group, this is the time for us to get some amazing locations.

‘Our vision is to maintain our investment in new stores and infrastructure in the recession.’

By next year, the group could have 10 stores in Singapore – three for Miu Miu, four or five for Prada, and one each for Church’s and Car Shoe, said Mr Suhl.

He also denied that Miu Miu and Prada offered deep discounts this past sale season because business was bad.

‘Miu Miu and Prada in Singapore have been doing excellently. I can’t reveal numbers but the fact is we had a great season and relatively low stock levels. In fact, when we started the markdown, we were concerned that there wasn’t enough merchandise left in most categories to make targets.’

As a group, Mr Suhl said global sales are still ‘growing substantially in the double digits year-on-year’ – and have so far been ‘even better than expected in 2009 over 2008′.

Prada and Miu Miu will focus much of their expansion plans this year and the next in South Korea and China – which Mr Suhl termed ‘eternally developing markets’ – as well as in Japan, where Prada is ‘outperforming the market’ that has been reportedly battered in the recession.

The group is not resting on its laurels in Europe either, having just opened standalone stores in Athens, Istanbul, Madrid and London.

‘Our goal is to make retail 70 per cent of our overall sales, up from about 50 per cent last year. One of the ways to get there is by opening new stores; the other is to improve existing stores, which we’re continually working on.’

But there may be a stumbling block yet to Prada’s expansive ambitions: The planned initial public offering (IPO), which has been put off three times so far, appears set for another delay.

Prada considered an IPO in 2001 but this was derailed by market turbulence after the Sept 11 terrorist attacks. Since then, it has put off listing and turned instead to debt, which The Financial Times said was about 1.1 billion euros (S$2.25 billion) at the end of last year.

The paper also reported talks were under way between the firm and its creditors, led by Italian banks UniCredit and Intesa Sanpaolo, to reschedule the repayment of 350 million euros that matures in the summer of next year. Italian newspaper La Repubblica said Prada will now delay its IPO until 2012.

Mr Suhl declined to comment on these reports, but said: ‘It’s a no-brainer: You list when the time and conditions are right – otherwise, you don’t. I can’t tell you when it will happen. I don’t think anyone really knows. It’s just been bad luck, really, but the markets will guide us.’

He believes that Prada’s strengths in ‘prolific product development and innovation’ resulting in ‘balanced sales across each category’ will stand it in good stead.

The Prada group earned a net profit of 127 million euros in 2007, thanks to sales which rose 18.8 per cent on 2006 to reach 1.66 billion euros.

Revenue for the Prada brand alone was 1.3 billion euros in 2007, up 10 per cent on 2006. Miu Miu, no longer Prada’s ‘little sister brand’, saw sales surge 43 per cent to hit 233 million euros in 2007.

New hotel with luxury shopping outlets to replace former Crown Prince Hotel

Source : Channel NewsAsia – 17 Jul 2009

A new five-star hotel with luxury shopping outlets will soon replace the former Crown Prince Hotel along Orchard Road.

Set to open next year, the Grand Park Orchard Hotel and the Knightsbridge retail space linked to it will add to the buzz along the rejuvenated shopping district.

Its retail space will almost double to about 83,000 square feet.

It is part of Park Hotel Group’s plan – which was conceived in 2005 when it first bought the property – for a flagship property in its portfolio.

Allen Law, director, Park Hotel Group, said: “When we evaluate the concept of our mall, we look at our hotel portion as well. We are targeting this property to be our flagship property in our portfolio. We want to have some statement as of how our hotel group can transform an…old hotel into something totally new…So, first of all, that is our consideration.

“And, looking at the retail podium, we want to embark on a concept that is not so conventional in the Singapore context yet. But we do see this concept in places like Hong Kong, Japan, and even London. So, we have a concept that captures all the flagship brands and it is a collection of street front flagship stores…”

Knightsbridge tenants will have a double-storey facade facing Orchard Road.

About 50 per cent of space has been leased out, mainly to fashion brands.

Park Hotel Group said demand is strong despite the poor economic environment, but other challenges persist.

Mr Law said: “In terms of the economic outlook, it does affect the timeline in terms of the decision-making process. Our project has no difficulty in garnering interests from all these international branches.

“However due to their, maybe difficulties in other operations in different parts of the world, it may affect their decision-making in opening a store in Singapore. They are more careful in the sense that they look at their overall portfolio, and have to take a little bit more time…to make the commitment.”

The Knightsbridge stretch of retail outlets will link to the new Grand Park Orchard Hotel. Park Hotel Group is revamping the entire look of the building, noting that the original is almost 20 years old. It added that it sees a lack of rooms along Orchard Road, and expects strong demand when it opens for business.

Luxe glass curves

Source : Straits Times – 4 Jul 2009

French luxury label Louis Vuitton is making waves, literally, with its Ion Orchard boutique. The 905 sq m store facing Orchard Road boasts the world’s first curved glass facade.

Designed by New York-based architecture firm Front Inc, it is a new look for a brand whose landmark stores such as its seven-storey flagship at Champs Elysees in Paris have box-like shells.

The store, which opened its doors to the public yesterday, is the chain’s largest outlet in South-east Asia.

A spokesman declined to reveal figures, but the cost of creating the duo-toned glass facade is believed to be hefty. Inspired by the folds of the label’s iconic Damier check scarf, all 197 glass panels of the facade were handmade and mould-textured by a glassmaker in London.

Located directly above the Mass Rapid Transit underground system, the boutique has an exterior which hangs like a glass curtain from the ceiling instead of being fixed on the floor.

It is one of the many architectural features at the outlet, the first to open for business at the mega-mall which is scheduled to launch on July 21.

Mr Jean-Baptiste Debains, president of Louis Vuitton Asia Pacific, said at a press conference at the store on Thursday: ‘In the past five to 10 years, not much has happened for retail and luxury here, so this is an important store. It marks the renewal of Singapore as a luxury hub for South-east Asia.’

The store interior is designed by the label’s own architecture team in Paris – which includes Singaporean Ho Kar-Hwa, the architectural design director for Louis Vuitton Asia Pacific – and has a curved layout to match the undulating glass exterior.

On the first floor, for example, there is a curved bag bar for women, which measures more than 9m, as well as a rotunda area that houses men’s accessories.

A circular staircase leads to the second storey where men and women’s ready-to-wear, men’s shoes and women’s leather goods and watches are sold.

Bathed in warm orange light and furnished with lush carpets and leather settees, the overall atmosphere is sophisticated yet intimate, much like a private dressing room.

Local show producer Daniel Boey, who attended the opening party on Thursday, says: ‘The glass facade is imposing and gives the store an air of dramatic fabulousness. It looks really grand, all lit up at night, like a showcase for a beautiful store.’

Louis Vuitton store may open at one of Singapore’s IR

Source : Channel NewsAsia – 2 Jul 2009

Global luxury retailer Louis Vuitton has said it is in discussions to open a store at one of the two upcoming integrated resorts in Singapore scheduled to open next year.

This was revealed at a preview of its latest global store, which will open at ION Orchard on Friday.

Jean-Baptiste Debains, president of Louis Vuitton Asia Pacific, said: “We’re looking at it seriously. No decision has been taken now, but for sure it is an exciting project.

“We believe that Singapore has a real role to play as a hub for Southeast Asia in retail, and in luxury retail in particular.”

The store at ION Orchard is Louis Vuitton’s first and largest global store in Southeast Asia, and only its second in the world to showcase Louis Vuitton’s full range of products, including shoes, watches and its trademark leather goods.

Louis Vuitton has three other stores in Singapore – Ngee Ann City, Raffles Hotel and DFS Scotts Walk – but they do not have its full range of products.

The retailer has some 77 stores across the Asia Pacific region, with another five stores slated to open in the region later this year.

Tenant upset by closure

Source : Straits Times - 24 Sep 2008

THE closing of roads leading to the SingTel Singapore Grand Prix circuit has upset some shop and restaurant tenants at Suntec City and Marina Square.

Many of the them told The Straits Times that business has nose-dived owing to the inconvenience following the road closure. Others blamed the slower economy.

Several roads, such as Beach Road and Bras Basah Road, had sections closed since yesterday in preparation for the weekend’s F1 race.

Said Adelina Kamarulzaman, 25, and a store manager at the Build-A-Bear-Workshop at Suntec City: ‘On a normal weekday, we carry out about 20 transactions.

‘On Monday, we had only eight. And we have not had a single sale today.

‘Usually, by this time (2pm), we would already have five transactions.’

To add to their woes, four birthday parties scheduled at the store during the weekend, plus another one on Friday, were all cancelled.

She said that customers cited road closure as the reason for the change in plans.

Francis Lee, 25, a sales executive at a handphone shop in Suntec City, also noted a downturn in business.

He said: ‘Since Monday, business has slowed down. The crowd has gone down by about half.’

Its patrons usually consist of churchgoers. But the store will have to do without them this Sunday as the New Creation Church will be moving its services to the Singapore Indoor Stadium at Kallang.

Lee said: ‘Every weekend, there are about 20,000 churchgoers. Although we can’t say that everyone will come to our shop, they form a large part of the crowd.’

Deacon Matthew Kang confirmed that the decision to switch its services elsewhere was due to the inconvenience caused by road closure.

Student teacher Jasline Ang, 24, is one churchgoer who will divert from her normal routine of eating, shopping and catching the occasional movie at Suntec City. Instead, she will be going to Kallang’s Leisure Park this weekend.

Another shopper, Lim Siew Kiang, 20, will also be avoiding the Marina area and turning to malls like VivoCity.

Still, some tenants in the area can count on office workers for support.

When The Straits Times went to Suntec City and Marina Square over the past two days, many office workers were seen there during lunchtime.

Bank employee Eugene Tian, 31, whose office at the Centennial Tower is a short walk away from Suntec City, is one such patron.

He said: ‘The road closure does not bother me. I come here for lunch every day.’

A check at Suntec City’s Food Republic indicated brisk business, with some patrons resorting to using tissue paper to reserve seats.

However, most of the restaurant tenants at Suntec City expressed concern.

Said Jinger Ban Dan, 36, a supervisor at Kenny Rogers: ‘It’s been really quiet today. We had fewer than 80 customers during lunchtime.

‘Usually, we have about 120 customers on a weekday.’

Over at Ichiban, senior assistant manager Moon Hung, 30, said: ‘Our takings during lunch today were about $500 less than a normal weekday.’

While some tenants are not expecting business to pick up, others are hopeful that the 40,000 tourists expected to be in Singapore for the F1 race will have the cash registers ringing soon.

Hung said: ‘We have strengthened our manpower because we heard that the hotels around this area are fully booked.

‘We hope business will improve during the coming days.’

Assistant manager at Marina Square’s Gain City Ho Eng Keng, 52, added: ‘We have to be optimistic. Hopefully, more tourists will come to Singapore during race days, and shop for electronics such as cameras and handycams.’

BUSINESS AFFECTED

‘There was no business on Monday. The tourists never came. Today’s takings - only $18 so far.’ - SUSAN NEO, sales assistant, on business at her jewellery and accessories store, in the early afternoon

‘This is the first time F1 is in Singapore so we don’t know what to expect. This month’s takings have been the lowest of the year so far. I just hope that this weekend will be better, especially when people have gotten their pay.’ - ALMA GABRIEL, restaurant supervisor, on the effect on the food business

‘I’m not sure. It’s either going to be very good or very bad. F1 ticket holders will either be going to just watch the race or may shop and eat before and after the race.’ - KEITH LEE, owner of a push-cart shop, on whether there will be an upturn in business during race days

‘Staff members have been standing around doing nothing.’ - JASMINE WONG, manager of a restaurant, on the poor business

‘This month, business has dipped by 20 per cent. It may not be because of F1, but rather, purchasing power has been affected.’ - EDMUND PEK, who works in a push-cart shop selling personalised items

‘We usually have some reservations, but there’s been nothing so far today.’ - SEBASTIN CHACKO, restaurant captain

‘Since Monday, business has started to slow down. The crowd has gone down by about half.’ - FRANCIS LEE, sales executive, on business at his mobile phone store

‘We have to be optimistic. Hopefully, more tourists will come to Singapore during race days.’ - HO ENG KENG, assistant manager at Marina Square’s Gain City

‘We have strengthened our manpower because we heard the hotels around this area are fully booked. We hope business will improve during the coming days.’ - MOON HUNG, senior assistant manager at a restaurant

Waterfront cluster with high-end appeal

Source : Straits Times - 20 May 2008

New Fullerton Heritage zone has luxury retail and dining outlets to draw the well-heeled

RAFFLES Place may be best known as the arena where high-flying bankers and corporate executives slog away for handsome salaries. But a small patch of it is set to become a luxury retail haven where they can spend their hard-earned cash on art, jewellery and fine dining.

The waterfront strip around the historic Collyer Quay is being transformed into a playground for well-heeled locals and tourists, as developers of the Fullerton Heritage zone seek to lure these big spenders away from Orchard Road.

Features range from a luxury retail cluster in The Fullerton Hotel to a classy Chinese restaurant and bar in Clifford Pier by Hong Kong’s trendy Aqua restaurant group.

The overriding strategy is clearly to pull in the well-to-do who might normally shop and dine in and around Orchard Road, the country’s main shopping belt.

The Fullerton Heritage’s general manager, Ms Sulian Tan-Wijaya, said the waterfront destination will ‘create a new luxury retail cluster that currently does not exist in the Raffles Place area’.

Its expected clientele will include business and leisure travellers, executives from the Central Business District (CBD) and new Marina Bay Financial Centre, casino patrons and residents from upcoming condominiums nearby like The Sail and Marina Bay Residences.

The retail element will be concentrated at The Fullerton Hotel, where under-utilised conference rooms have been converted into more than 5,000 sq ft of space for five shops.

The retailers include London-based Singapore fashion designer Ashley Isham; jewellers Mouawad, Vois and Raffles Jeweller; and a high-end Chinese and Asian contemporary art gallery called I Preciation.

I Preciation has been operating since 2003, while the remaining four will open by July - in time to cash in on the Formula One Grand Prix that is expected to draw 240,000 spectators in September.

Ms Tan-Wijaya is confident that the outlets will enjoy ‘a steady stream of business’ despite the hefty price tags, as 80 per cent of The Fullerton Hotel’s guests are corporate clients.

Brisk sales at I Preciation, where art works go for anything between $10,000 and $4 million, back up her view.

The majority of its clients are executives, high-net worth individuals and keen collectors who work in the CBD, said Mr C.T. Lim, one of the gallery’s two owners.

Raffles Jeweller director Margaret Lau said she was lured to The Fullerton Hotel from Orchard Road, where she has been operating for the last 15 years.

She said the hotel’s rent is not lower than that in Orchard Road, but she looks forward to ‘the prospect of opening up the business to an international corporate clientele’.

She is also confident that her regular clients will make the trip to this newly designated ‘destination shopping’ zone to buy her bling.

The Fullerton Heritage refers to a string of buildings and land opposite Marina Bay owned by Hong Kong-based Sino Land, the sister company of Singapore property giant Far East Organization.

They include existing buildings One Fullerton, The Fullerton Hotel, The Fullerton Waterboat House, Clifford Pier and Customs House.

Sino Land, which is controlled by the family of property magnate Ng Teng Fong, won the tender for the Collyer Quay corridor in December 2006 with a bid of $165.8 million.

Its ambitious plan to revamp the existing buildings while preserving the area’s distinctive architecture is part of larger plans to rejuvenate the Marina Bay area by 2010.

It is also building a luxury boutique hotel called The Fullerton Bay Hotel, which will have 98 rooms with water views, on the site.

Appetites will be catered for with One Fullerton set for an August relaunch with four new eateries.

And Aqua, famed in Hong Kong for its ultra-stylish harbourfront restaurant in Kowloon, will unveil its plans for its ‘Chinese fine-dining’ restaurant in Clifford Pier later this year.

‘We see The Fullerton Heritage as helping to enhance Singapore’s position as a leading tourist, business and lifestyle destination,’ said Ms Tan-Wijaya.