Wednesday, October 28, 2009

Straits Times: Metro seeks to expand reach into suburbs

28 Oct, 2009
Metro seeks to expand reach into suburbs
Retail chain has allotted at least $14m for growth in S'pore and overseas
By Leow Si Wan

RETAIL chain Metro is looking for more opportunities to expand in 'underserved' areas of Singapore, while aggressively pushing into China and Indonesia.

The firm's local reach expanded last Friday when it launched its fourth store at City Square Mall near Little India - its first opening here in seven years.

Managing director Wong Sioe Hong told The Straits Times how the chain, which had dwindled in the mid-1990s, had changed to meet new challenges.

'We have been waiting for an opportunity but there weren't any new malls for the past few years. Most of the new ones are on the Orchard stretch, which is already crowded,' said Mrs Wong.

She said the City Square store in Kitchener Road is ideal because there are no other major department stores within a 4km radius. And its location near Little India means Metro can 'tap a steady flow of international visitors'. By next year, the mall is expected to see a footfall of 1.3 million visitors.

There are even more ambitious plans, with between US$10 million (S$14 million) and US$20 million earmarked for growth here and overseas.

Metro will add another 'two to three' outlets by next year to its existing five department stores in Indonesia.

It also aims to open up to 50 Monsoon Accessorize stores in China over the next four years. The company is a franchisee of the British brand.

But Metro's main presence here is felt through its well-known stores at the Paragon, Causeway Point in Woodlands, Compass Point in Sengkang and City Square Mall, where the new store is located.

While there are no definite plans for more stores, Metro is 'definitely expanding into the suburbs' and will take into account factors such as size of retail market and location before making decisions.

It all marks a turnaround for a once high-flying department store chain that found itself on the margins.

Metro started in 1957 with a small store at High Street. But it grew fast and was listed on the Singapore Exchange in 1973. It also became a property investment group that now has nearly $1 billion in net assets and dealings in China, Indonesia, Malaysia and Singapore.

At its peak, Metro had five stores in the Orchard vicinity - including at Far East Plaza, Lucky Plaza and Scotts Shopping Centre.There were also two stores in the suburbs - in Bukit Timah and Marine Parade.

But the tide turned in the 1990s and stores started to close. The outlet at Century Square in Tampines was the last to go, shutting its doors in 2007.

Mrs Wong said the main factor was that many operating locations were 'no longer viable or relevant'.

'Some stores were operating in buildings that were torn down, or which had a change in use,' she said.

Higher operating costs and the entry of competitors like Takashimaya made the retail landscape more challenging.

But Metro never gave up on retail despite its success in the property field.

'The retail brand is highly recognised and gives us branding. More importantly, Metro is a local brand and we will continue to have a footing here,' she said.

Metro has been evolving to try to stay relevant to consumers.

It has brought in international brands from Europe, Latin America and the United States, after extensive customer research.

Mrs Wong said: 'Singaporeans want quality and sophistication. They are educated and have more disposable income. They still need pots and pans, but they want branded pots and pans now.'

It is also focusing on service. More than 90 per cent of its employees - even service staff of its suppliers - have undertaken government-related service training workshops.

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