Metro to close Paragon, Causeway Point department stores when leases end in retail overhaul
Metro says it intends to progressively move away from the traditional large department store format following a "strategic review" of its retail operations.
A view of the Metro department store at Paragon mall. (Photo: Metro website)
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SINGAPORE: Metro Holdings will stop operating its department stores at Paragon and Causeway Point when the current leases expire, as it intends to progressively move away from traditional large-format department stores.
In a bourse filing on Monday (Jul 20), Metro said the shift follows a "strategic review" of its retail operations as it seeks to better align with evolving consumer preferences, shopping habits and market trends.
The Paragon and Causeway Point outlets are Metro's last remaining large-format department stores in Singapore.
The company plans to transition in phases from its long-standing department store model to a more flexible retail approach aimed at improving customer engagement, boosting operational efficiency and pursuing new growth opportunities.
"Accordingly, the group will not operate its existing large-format department stores at Metro Paragon and Metro Causeway Point upon the conclusion of the existing lease arrangements for those locations," the company said.
As part of its shift in retail strategy, the group is exploring a range of other concepts, including smaller-format stores, multi-specialty outlets, curated shopping experiences and pop-up store initiatives.
Metro said that it is in discussions with its current landlords as well as other landlords regarding the rollout of new multi-concept retail stores.
It added that its management has begun assessing potential sites, taking into account factors such as location suitability, rental terms, financial viability, implementation timelines and operational considerations.
The timeline and scope of the transition remain under review and subject to detailed execution planning, Metro said.
Paragon said Metro has expressed interest in remaining at Paragon under new retail concept stores, and discussions are ongoing. "Feasibility studies are currently underway, and we will share further details once plans are finalised," it said.
The mall added that it has been looking to strengthen its tenant mix and introduce fresh concepts since the completion of its acquisition by CapitaLand Integrated Commercial Trust on Jul 1.
EVOLVING CUSTOMER EXPECTATIONS
In a separate regulatory filing on Monday, Metro group CEO Yip Hoong Mun cited the "challenging operating environment" and today's "fundamentally different" consumer expectations as reasons for the retail strategy overhaul.
"Our refreshed retail strategy is designed to meet customers’ evolving expectations while having greater flexibility to introduce new concepts, brands and partnerships," he said.
Metro chairman Tan Soo Khoon also noted that the retail landscape was transforming and it was important for the company to "evolve alongside it".
"Following a comprehensive review, the board believes this strategic repositioning will better position Metro for long-term sustainable growth by creating a more agile retail platform that can adapt to changing consumer expectations and capture new opportunities."
The company is assessing the financial implications of the transition and said it is not yet able to quantify the full impact on earnings.
However, the board said it does not expect the move to have a material effect on the group's consolidated net tangible assets or earnings per share for the financial year ending Mar 31, 2027. Shares of Metro had closed at S$0.46 on Monday.
It will also continue pursuing opportunities through Grand Brands Asia, its brand management joint venture that focuses on international retail brands and immersive concept stores.
Metro said it will provide further updates when there are material developments relating to the implementation of its new retail strategy.
The homegrown operator closed its six-storey flagship store at The Centrepoint in 2019, while it also previously ran outlets in City Square and Compass Point in Sengkang.
