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Fashion

Is It Checkout Time For The Department Store?

Closures were happening in Singapore before Covid-19, amid high rents and a younger demographic of shoppers. But more unique products and a better in-store experience may save the day.

An icon of Singapore retail: the CK Tang Ltd department store in Orchard Road in 1958. Photo: The Straits Times

It is no secret that the fortunes of department stores have been dwindling, amid changing consumer preferences and the rise of e-commerce. As the Covid-19 pandemic forces retailers worldwide to shut their doors, the department store model of sprawling stores and large inventories that span every imaginable category has been put under additional strain.

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Is this the final blow for the format? Already, in the United States, giants like Neiman Marcus and JC Penney have filed for bankruptcy. Nordstrom announced the closure of 16 stores, while Macy’s is seeking financing amid a projected first-quarter operating loss of around US$1 billion (S$1.4 billion).

Retail sales in March, before the start of the circuit breaker, saw sales at department stores drop by 39 per cent year-on-year – one of the largest declines among retail categories tracked by the Singapore Department of Statistics.

In Singapore, department stores such as Tangs and Metro are mostly keeping mum about whether the impact of the outbreak, which is expected to reshape the retail sector, will lead to closures. But the outlook is bleak.

Retail sales in March, before the start of the circuit breaker that forced most retail stores to shut for the duration, registered the sharpest drop in almost 22 years. They fell 13 per cent from the same period last year.

Shoppers rushed in to the Robinsons The Heeren outlet at 7am during The Great Blackout Sale on Nov 29, 2019. Photo: The Straits Times

Read More: Updated: Shopping In Singapore During The Circuit-Breaker

Department store sales saw a 39 per cent year-on-year drop – one of the largest declines among retail categories tracked by the Singapore Department of Statistics. Online transactions, meanwhile, made up 8.5 per cent of overall retail sales in March, nearly double the 4.3 per cent for the same month in 2018, and up from 5.3 per cent last year.

With store closures stretching into their third month, many retailers are turning their focus to e-commerce to survive. But experts say that an online pivot may not be enough to save department stores.