Lifeline for small firms after filing notification for relief

Mr Lik Wong, director of travel-related gear retailer X-Boundaries, is diversifying to selling foldable bikes under the Montbell brand because travel-related sales are still in the doldrums. PHOTO: COURTESY OF LIK WONG Ms Cynthia Yew saw demand for e
Ms Cynthia Yew saw demand for eyebrow embroidery services dry up at her three Highbrow outlets during the circuit breaker period. She had to file a notification for relief against the landlord of her shop in Marine Parade for refusing to reduce her rent. ST PHOTO: YONG LI XUAN
Mr Lik Wong, director of travel-related gear retailer X-Boundaries, is diversifying to selling foldable bikes under the Montbell brand because travel-related sales are still in the doldrums. PHOTO: COURTESY OF LIK WONG Ms Cynthia Yew saw demand for e
Mr Lik Wong, director of travel-related gear retailer X-Boundaries, is diversifying to selling foldable bikes under the Montbell brand because travel-related sales are still in the doldrums. PHOTO: COURTESY OF LIK WONG

As the coronavirus spread around the world and lockdowns and border closures began picking up pace last March, sales of winter travel gear at Mr Lik Wong's two shops began evaporating.

By December, the 49-year-old director of X-Boundaries had to close one of his shops in the City Hall area. The other shop was located in Novena.

But business still did not return as winter travel and outbound tourism remain mostly grounded.

Squeezed by rentals and landlords of both shops refusing to negotiate rental waivers and support, Mr Wong filed notifications for relief against them.

"It was a very difficult conversation. Even though both shops suffered more than 70 per cent drops in sales, the landlords refused to negotiate on further rental waivers or any support. I had stopped paying rent since March, and after Nov 19, they issued letters of demand to me," he said.

Eventually, they reached an agreement that he would leave both malls, Mr Wong said.

He has set up a new shop in another mall near City Hall, but with travel-related sales still in the doldrums, he is diversifying to selling foldable bikes under the Montbell brand and trying to sell more on online platforms.

"But it is not easy. There isn't enough supply from Japan because of supply chain issues. Meanwhile, I am stuck with winter gear that isn't selling because no one is holidaying," he said.

To keep business going, he has had to sell his goods below cost.

"My staff know that I am selling at below cost. I tell them to sell enough so I can pay their salaries. I know they need their jobs to feed their families.

"The Government should speed up fair tenancy legislation. Measures like the Jobs Support Scheme are good, but small retailers need laws that can help them," Mr Wong said.

In October last year, Trade and Industry Minister Chan Chun Sing said an update on a fair tenancy framework is expected "in the coming months".

Another small-business owner, Ms Cynthia Yew, saw demand for eyebrow embroidery services dry up at her three Highbrow outlets during the circuit breaker period. But it gradually bounced back by November, and she was able to break even for the year.

Ms Yew, 49, had to file a notification for relief against the landlord of her shop in Marine Parade for refusing to reduce her rent. "It did help because we got additional rent relief of $3,000 to $4,000, plus rent waivers, in return for our continuing with the remainder of our lease," she said.

But it was hard going negotiating with her landlord, she said.

"They initially told us that if we cannot make it, we still have to pay the remainder of our lease, plus marketing and reinstatement fees, and even for the space for the signboard. To end the lease prematurely would have been very expensive, as I still had two years left. They had my neck on the chopping block," Ms Yew said.

Fortunately, she said, she was able to negotiate a reduced monthly rental at her second shop in Buona Vista as her lease was up for renewal. At her third outlet in the City Hall area, the landlord cut her rent as she had to move to another unit in the mall.

"Without the rental relief framework, it won't be the end of our business, but it would have been very tough because we would have to tap the working capital loan we took out of fear there would be renewed lockdowns," Ms Yew said.

"Luckily, our sales bounced back, and we are now considering using the loan to open a fourth outlet."

Grace Leong

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A version of this article appeared in the print edition of The Straits Times on February 03, 2021, with the headline Lifeline for small firms after filing notification for relief. Subscribe