SINGAPORE: Metro will close its department stores at Paragon and Causeway Point when their leases expire, following a strategic review of the group’s retail business.
No timeline was provided on when the leases would end.
In a Singapore Exchange filing on July 20, the mainboard-listed company said it is “evaluating a range of other retail formats, including smaller-format stores, multi-speciality concept stores, curated retail experiences and pop-up store initiatives”.
Metro added that it is currently in discussions with its existing landlords, as well as other landlords, to roll out the new concept stores and intends to progressively transition from the current large-format department store model to a more flexible one in response to customer preferences.
In a statement, group chief executive Yip Hoong Mun noted that the group’s new retail strategy “is designed to meet customers’ evolving expectations while having greater flexibility to introduce new concepts, brands and partnerships”.
Metro is still finalising the timeline for its new retail strategy and assessing its financial impact, which it is not yet able to quantify.
However, it does not expect the transition to have a material impact on its net assets or earnings per share for the financial year ending March 31, 2027.
CapitaLand Integrated Commercial Trust, which completed the acquisition of Paragon on July 1, said in a statement that it is planning to optimise and selectively reconfigure certain areas in the mall to strengthen the tenant mix and introduce fresh concepts and experiences, including the areas currently occupied by Metro.
Causeway Point’s landlord is Frasers Centrepoint Trust.
Metro said the move will better position it to adapt to changing consumer preferences and opportunities in Singapore’s retail sector, which continues to face a challenging operating environment, with consumer sentiment weighed down by inflationary pressures.
In its results presentation for the year ended March 31, Metro said retail sales were expected to remain subdued and weigh on the performance of its department stores at Paragon and Causeway Point and online platforms.
The retailer, which also has a property business, had earlier reported weaker sales at the two department stores dragged down revenue and contributed to another year of losses. — The Straits Times/ANN
