SINGAPORE - Higher rents dragged department store operator Isetan (Singapore) into the red to the tune of $3.1 million for the year ended Dec 31.
The group had turned in a net profit of $6.5 million for 2013.
Sales rose by 2.2 per cent to $340.3 million.
Other than its new store in Jurong East which completed its first full year of operations in 2014, sales at the other stores registered lower sales last year, due to the challenging and competitive environment.
In line with the higher overall sales, gross profit amount has increased.
At Isetan Scotts, where major renovations carried out by the respective landlords of Shaw House and Shaw Centre have been completed, sales have not fully recovered to the pre-renovation levels.
The situation was exacerbated by an upward adjustment in rent for the store during the year.
In addition, the start-up nature of the new store at Jurong East and the lower rental income from Isetan Orchard contributed to the group loss.
The cause of the lower rental income was mainly due to the cessation of two leases at Isetan Orchard.
Loss per share amounted to 7.6 cents compared to earnings of 15.86 previously while net asset value per share eased to $4.87 compared to $5.02 a year earlier.
Looking ahead, the company said Isetan Orchard will undergo a period of transition commencing from the second quarter in which its space will be converted into units for rental.
Under the circumstances, there will be no sales and rental income at the store until potential tenants commence their leases, which are expected in the fourth quarter.
An unchanged final dividend of 7.5 cents a share was proposed.