Published May 9, 2009

All tingly at the mall

Anticipation is running high for this year's GSS, billed by some as the mother of all sales

By UMA SHANKARI

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THE annual Great Singapore Sale (GSS) will kick off on May 29, but with three weeks to go, many retailers here have already started rolling out their own sales.

BETTING ON EXPANSION Retailers going ahead with expansion plans include luxury shoemaker Jimmy Choo, which recently opened its largest flagship store in the region in Paragon Shopping Centre

Isetan, for example, will start its sale next week. Two other major department stores, Robinsons and Tangs, have also had various sales over the last few weeks. And luxury brands and retailers such as Armani Exchange and Club 21 have also been having their own ad hoc sales over the past few months - where discounts of up to 80 per cent are not uncommon.

The offers at this year's GSS are certain to be mouth-watering, with one analyst saying this year's GSS can be expected to be 'the mother of all sales'. Analysts, however, are unsure if shoppers will bite.

Right now, there is a sense of exuberance among consumers, fuelled by the recent stock market rally. But shoppers can still be expected to hold back on non-essential items, analysts say.

'I suspect that there will still be caution when it comes to discretionary spending,' said CIMB-GK economist Song Seng Wun. For one thing, the unemployment numbers are expected to worsen.

A staggering 12,600 workers here lost their jobs in the first quarter of the year, and the overall unemployment rate rose from 2.5 per cent in December 2008 to 3.2 per cent in March 2009.

Visitor arrivals to Singapore are also falling, which means that tourist spending will take a hit.

Retail sales fell for the fifth straight month in February - the last month for which official data is available - easing 5.7 per cent year on year. Mr Song estimates that retail sales - excluding sales of motor vehicles and takings at petrol service stations - fell about 6 per cent in Q1 2009 compared to a year ago. He expects the year-on-year fall to ease to 3-4 per cent in second quarter.

But in spite of the negative news, market players are hoping for the best. In particular, malls and retailers are still betting big on Orchard Road, arguably the nexus of the GSS every year.

Some retailers are going ahead with expansion plans in Orchard Road. Luxury shoemaker Jimmy Choo recently opened its largest flagship store in the region in Paragon Shopping Centre. The 1,500-square-foot boutique is the largest in Asia outside of Japan.

Joshua Schulman, chief executive of Jimmy Choo, said the brand has seen robust growth in Singapore and the rest of Asia. He intends to focus Jimmy Choo's presence in Singapore on Orchard Road.

'We're looking at other opportunities,' said Mr Schulman. 'There are going to be new projects on Orchard Road, and we are looking at them.'

Luxury watch manufacturer IWC Schaffhausen is also expanding in Orchard. The Swiss company will set up its first standalone boutique in Asia outside Hong Kong in the upcoming mall Ion Orchard.

Andreas Boesch, general manager of IWC's South-east Asia division, said that the company invested a 'significant' amount in the upcoming boutique. While the economic climate might be muted now, setting up a boutique on Orchard Road makes sense when taking the long-term view, Mr Boesch said.

Mall owners and operators seem to be taking the same view. Several malls along Orchard Road - including Paragon Shopping Centre, Mandarin Gallery and Palais Renaissance - recently underwent face-lifts. Others, such as The Heeren, have announced plans for upgrades. New malls Ion Orchard and Orchard Central will also be opening their doors soon - the first new malls to come up on Orchard Road in more than a decade.

Doing their part, the authorities recently completed a $40 million makeover of Orchard Road, which added new street furniture, repaved pedestrian walkways and widened walkways.

On the back of all this, The Orchard Road Business Association (ORBA) recently launched a new brand position for the street with the tagline, Orchard Road - A Great Street. 2009 is a year in which ORBA can really make a statement about the attractiveness of Orchard Road with all the new projects and tenants moving in, said ORBA chairman May Sng.