Marks & Spencer May Follow Robinsons’ Exit Despite New S’pore Store
About two weeks ago (October 30), the Robinsons department store announced its final exit from Singapore, following losses in recent years.
The 162-year-old department store, one of the oldest in Singapore, said it had started a process of liquidating its remaining stores due to weak demand resulting from the Covid-19 pandemic.
It had closed its store at Jem Mall in Jurong earlier in August, while its last two stores at Heeren and Raffles City Mall remain open for sales to close.
In contrast, its sister brand Marks & Spencer recently unveiled a new pop-up store at Waterway Point shopping center.
For a long time, Singaporean retailers have faced headwinds on several fronts, including high operating costs and competition from online shopping.
This has prompted Singaporeans to question the survivability of department stores in Singapore.
From John Little to Robinsons
Robinsons and Marks & Spencer are both owned by Dubai-based conglomerate Al-Futtaim Group.
She also carries brands such as Zara, Massimo Dutti, Bebe, Bershka, Lacoste, Mango and Ted Baker in her portfolio.
He also ran the John Little department store chain, which closed all of its stores in Singapore in 2016 after 174 years in business. The John Little chain was acquired by Robinsons in 1955.
The decision to close its John Little outlets was made “after assessing the suitability and sustainability of John Little’s brick and mortar business.”
At his peak in the early 2000s, John Little had seven branches, including his flagship store at Specialists Mall, which closed after more than 20 years in 2007.
Four years later, Robinsons also announced that it would be folding its last two outlets at Heeren and Raffles City Shopping Center.
According to The Business Times, the department store has recorded at least six years of losses amid declining revenues. Financial records show the company recorded losses of up to $ 54.4 million in 2018.
Its revenue also declined – it generated $ 153.8 million in revenue in the same year, a significant drop from the $ 257.3 million it generated in 2014.
At the end of August 2020, Robinsons closed its Jem outlet, saying it was “no longer a sustainable option” to operate several large-scale department stores in Singapore.
In line with the changing retail landscape and the Covid-19 pandemic, Robinsons has stepped up efforts to reach online customers.
In addition to its existing online store, which has undergone an overhaul, it has also launched its products on Lazada’s “LazMall”. These plans did not help him survive, however.
Marks & Spencer records first loss in a century
On the flip side, Marks & Spencer (M&S) seems unfazed by opening a new outlet at Waterway Point, bringing its total number of outlets here to 11.
The store opened on October 31 and, according to The Business Times, it will operate as a “pop-up” for the next six months.
M&S has said it has no plans to shut down its “successful business” in Singapore.
However, the departmental chain seems to be walking on thin ice. They made an after-tax profit of S $ 101,613 in 2018, up from S $ 2.9 million a year ago.
Last week it was also reported that M&S suffered its first loss in nearly 100 years as a result of the pandemic.
It recorded a pre-tax loss of £ 87.6 million (S $ 156.7 million) in the six months ended September 26. The company lost £ 71.6million ($ 128.2million) after tax, and revenues fell 16% to £ 4 billion ($ 7.1 billion).
With such heavy losses, it does not seem viable for them to open a new store at this point.
However, it might just be a tactic to gain more market share. With Robinsons out of the market, Al-Futtaim could see it as a chance to attract Robinsons customers to Marks & Spencer, rather than existing chains such as Isetan or BHG.
M&S could take the opportunity to expand its influence in the market, having lived in its sister’s shadow for years.
Seeing how they chose to launch a new “pop up” instead of a full-fledged department store, they could test the waters to see how this strategy might work.
Either way, M&S is not out of the woods yet as they are currently in the red and may continue to suffer losses.
Therefore, they can follow in Robinsons footsteps and potentially face collapse after consecutive years of losses and continued pressure on physical retailers.
Featured Image Credit: Darren Bloggie
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