SINGAPORE - The raft of government support and other relief measures last year helped get the local distributor of Yankee Candle through what has been annus horribilis for many retailers, but even more challenging times may lie ahead.
The ending of rental rebates and the tapering of the Jobs Support Scheme (JSS) for most sectors are posing enough problems for Pure Senses, but managing director Logan Wong has other concerns on his plate as well, as do many others in the retail sector.
He cites ongoing supply disruptions, rising raw material and freight costs and now, the tighter Covid-19 curbs.
While retail shops can still open, Yankee Candle voluntarily shut its outlet at Jem mall from Monday night (May 17) until Wednesday after the Health Ministry strongly encouraged visitors to Jem or Westgate malls between May 10 and May 14 to get tested for Covid-19.
"We closed because our employees had not yet done their swab tests. And Jem is one of our top sales stores," Mr Wong said.
"Sales are now down more than 50 per cent each day.
"Last year, revenues dropped 100 per cent in April, but we switched to selling online and managed to recoup 20 per cent of total sales in May. We were back to normal by June because of pent-up demand."
But with its United States factories still not running at full capacity, the shortage of fresh supply is also affecting Yankee Candle revenues, he said.
The company has seven stores in Singapore, five in Hong Kong and three in Malaysia.
Fortunately, its cashflow situation last year was not too bad because of the government support it received in its three markets and a bridging loan it took out.
Its Malaysian operations managed to turn a profit last year because operational costs were significantly lower than in Hong Kong and Singapore. "But now, all three markets are suffering because of low supply," he said.
"We usually launch our spring/summer collection in March. But this year, we haven't received it yet. Because of the US shortage, we are being supplied out of Yankee Candle's plant in Europe. We are also diversifying to new brands," Mr Wong said.
"We were profitable before the pandemic hit, so we had cash reserves. Luckily, the Government gave JSS and other support that helped our cash flow.
"We also managed to convert a lot of our existing inventory to cash last year. But this year, we are running low on inventory. To sell more, we have to get more goods shipped in.
"We will need to start paying down the principal and interest on the loan starting in September. Currently, we are on track to pay the instalments, as long as the situation doesn't worsen."
Mr Wong said he has asked the Singapore outlets' landlords for one month of rent relief. "They said they will review my request, but so far none have acceded."
