What: Japanese retailer scales back Singapore operations from six to two stores amid rising rents and e-commerce growth, maintaining strategic Orchard Road flagship location.

Why it is important: This move illustrates the evolving retail landscape in Singapore, where department stores are strategically downsizing their physical presence while maintaining flagship locations in key shopping districts.

Isetan Singapore, a subsidiary of Japan's Mitsukoshi Holdings, has announced the closure of its Tampines outlet as the store's lease approaches expiry. Following this closure, the retailer will maintain only two locations in Singapore: its flagship store on Orchard Road and another outlet in Serangoon. This represents a significant reduction from its peak operation of six stores across the city-state. The company has affirmed its commitment to the Singapore market, emphasising continued service at its remaining locations. The consolidation comes in response to multiple market pressures, including escalating rental costs, the growing impact of e-commerce, and evolving consumer preferences moving away from traditional shopping mall experiences. This strategic realignment follows Isetan Singapore's delisting from the Singapore Exchange in September 2024, after Mitsukoshi acquired complete ownership of the operation. 

IADS Notes: Isetan Singapore's closure of its Tampines outlet reflects broader trends in Asian retail transformation. According to Inside Retail's April 2024 coverage , Isetan Singapore's privatisation by Mitsukoshi Holdings for US$103.6 million followed a 3.8% drop in sales and shift to net loss, indicating the need for strategic consolidation. Inside Retail's August 2024 analysis  highlighted how Asian department stores are adapting to changing consumer behaviors, with experts predicting approximately 10% of stores may close in the next 5-10 years, particularly affecting non-prime locations. This aligns with Inside Retail's September 2023 report  on Central World's transformation of former Isetan space in Bangkok, demonstrating how mall operators are successfully reimagining department store spaces with diverse retail and entertainment options. Inside Retail's January 2024 coverage  of Takashimaya's performance showed how successful department stores are concentrating resources in prime locations, with flagship stores generating significantly higher sales than regional outlets. Isetan's reduction from six stores to two, while maintaining its Orchard Road flagship, demonstrates this strategic focus on prime locations while addressing challenges from e-commerce growth and changing consumer preferences.

Isetan to shutter Singapore store