SINGAPORE: Despite the mixed bag of results that Japanese retailers have had in the competitive Singapore market, mall operator Lumine has high hopes and is betting on its smaller multi-concept store to make a difference.
This is according to chief executive Yuji Morimoto, who was speaking to Channel NewsAsia on Saturday (Nov 25) as Lumine unveiled its first international store at Clarke Quay Central in Singapore.
Established in 1966 as a subsidiary of the East Japan Railway Company, Lumine is seen as a premium department store with 16 outlets around Japan, including its key outlets at Tokyo’s Shinjuku station.
As the household brand eyes growth beyond its home market, the retailer set its sights on Singapore and Indonesia. It eventually decided to bet on Singapore as its first overseas stop following six months of research in 2015.
Apart from being “a hub of Southeast Asia”, the Singapore market stands out for its growing demand for less cookie-cutter fashion and higher purchasing power, said Mr Morimoto. There is also a gap in the local market for mid-priced Japanese fashion, he added.
However, Lumine’s entry comes at a time when the traditional retail market in Singapore continues to face a myriad of challenges, including intense competition from e-commerce, a persistent manpower crunch and cautious spending from domestic shoppers.
While Japanese brands such as Uniqlo and Muji have gone on an expansion spree in recent years, there have been less successful cases. Department store operator Parco shuttered its outlet in Millenia Walk in 2014, while Seiyu’s outlets were bought over by China’s Beijing Hualian Group (BHG) in 2005.
Japanese fashion label Lowrys Farm and lifestyle store Francfranc also had relatively short-lived ventures here. The former closed down eight outlets in 2015 after three years, while Francfranc pulled out of Singapore in 2014 after two years.
Lumine’s representatives noted the difficult operating environment in Singapore and after more than two years of preparation, came up with a unique strategy to try to win over shoppers.
Unlike its iconic mega malls that are directly connected to major stations within Tokyo, Lumine’s first stop in Singapore is a comparatively smaller 10,000 sq ft multi-concept store.
For now, it carries 20 Japanese clothing and accessory brands, such as popular label Tomorrowland and Fray I.D, with most of them making their appearance in Singapore for the first time.
“In Japan, Lumine is known as a shopping mall but here, we want to do something new,” Mr Morimoto said through a translator.
“If we had come in as a mall, there would be many restrictions in changing our brands and updating the items we have. But as a concept store, we will be able to adapt to the demands of Singaporean women speedily with the latest trends,” he said, adding that the selection of brands will be updated periodically based on demand.
Chief executive Yuji Morimoto flew in to Singapore to witness the opening of Lumine’s first international store. (Photo: Tang See Kit)
Lumine has also carved out a section for experimental Japanese brands, such as Emoda and Murua, and for the first time, set up its own cafe serving fruit parfaits.
Lumine Singapore’s managing director Naokazu Kozakai and business development manager Nao Miyawaki described the inclusion of a cafe as a “very important element” for the new venture given how fashion retailers have struggled in the local market and the importance of food and beverage (F&B) businesses in food-haven Singapore.
MULTI-CONCEPT STORE A ‘SAFER BET’: INDUSTRY OBSERVERS
Lumine’s strategy to start off with a multi-concept store is a “safer bet” given how department stores seem to be losing their shine among younger shoppers, noted Euromonitor International’s research analyst Chayadi Karim.
It can also avoid competition with more established rivals, such as Takashimaya and Isetan.
“By operating as a concept store, instead of a department store, it helps set an impression of Lumine, particularly among Singaporeans unaware of the brand, that it is an upmarket fashion retailer instead of just another department store,” Ms Karim said.
The store carries 20 Japanese clothing and accessory brands, with a majority being new to Singapore. (Photo: Jeremy Long)
Having a “scaled-down” multi-label store could also be a more “economical” option as Lumine attempts to fill the gap in the local market for mid-priced Japanese labels, said Mr Samuel Tan, course manager of Temasek Polytechnic’s diploma in retail management.
Meanwhile, the choice of location at Clarke Quay “could be a result of affordable rental terms”, noted Mr Tan.
Though located away from the main shopping belt along Orchard Road, it may work out for Lumine in the long run, he said.
“Clarke Quay Central is probably (the) next best location that is within the city but not on the downtown Orchard Road stretch. The location, which is the hub of the civic and cultural district, may also attract the tourist market.”
Echoing similar sentiments, Ms Karim noted that the Japanese retailer will “stand out more easily” given that Clarke Quay Central lacks a prominent anchor tenant and has F&B establishments as a large proportion of its tenants.
Preparations for the Lumine Singapore store began in June 2015. (Photo: Jeremy Long)
Moving forward, while Lumine still has ambitions for expansion in other parts of Asia, it is focusing on Singapore for now, said Mr Morimoto who flew in from Japan to witness the store opening.
“We have been very successful in Japan but we want to challenge ourselves,” he said.
“There were Japanese brands that have tried and failed in Singapore. It’s a competitive market but with many of the brands either in the high-end or fast-fashion, women in Singapore are looking for something in between,” Mr Morimoto told Channel NewsAsia. “We think we can cater to what they want.”
