Sales are falling at Japanese department store Isetan’s Orchard Road flagship, despite the popularity of its basement supermarket.
In an analysis of Isetan’s business predicament on the Straits Times, titled ‘Isetan needs more than a store refresh’, Marissa Lee writes the company’s stock has been trading “deep below its theoretical liquidation value” for years.
“A lack of confidence in how the company’s assets are being managed could have something to do with it,” she said.
According to the column, Isetan’s retail business recorded a net loss of S$21.2 million last year, significantly more than the $9.4 million loss it recorded a year earlier. Those losses included an impairment of $11.9 million for two underperforming stores and a $2.4 million provision for “onerous rental contracts”.
The company intends to reduce losses by investing $12 million in a makeover of the Isetan Scotts store on Shaw Road, converting it into a lifestyle destination, and introducing a new mobile platform this year to encourage traffic back in stores to redeem vouchers.
But some shareholders are less than impressed by the plan.
