Japanese department store operator Isetan has reported mounting losses in Singapore as sales fall and rents rise.
Group sales for the three months to June 30 were $71.467 million, a decrease of $10.819 million or 13.15 per cent over the same quarter a year ago. Isetan said the decrease was largely due to the closure of its Isetan Orchard store at the end of March to prepare the store space for subletting, and a slowdown in sales in all of its stores (except Isetan Jurong East) “due to an environment of slower economic growth and stiff competition amongst retailers”.
In the second quarter the company incurred a loss after tax of $5.847 million, compared to a loss of $1.214 million in 2014.
Higher rent at Isetan Scotts, affected both the store’s result and was the main reason for the overall increase in the rent outgoings.
“At Isetan Orchard, the process of finding tenants and converting the space for renting out is ongoing,” the company said in a statement.
“In this respect, there was no rental income from this store during Q2.”
“At Isetan Jurong East, although the store is experiencing sales growth, it is not contributing to profits yet. The general slowdown in sales was also a drag on the results of the Group for Q2.”
Its other stores are at Katong, Tampines and Serangoon Central.