Isetan not renewing lease of 'loss-making' Westgate store

Isetan Singapore noted that it has had discussions with JG Trustee on the lease renewal, but that both parties did not reach an agreement.
Isetan Singapore noted that it has had discussions with JG Trustee on the lease renewal, but that both parties did not reach an agreement.PHOTO: ISETAN

SINGAPORE - Isetan Singapore will not renew its lease with JG Trustee (JGT) for its "loss-making" store in Westgate, the Japanese department store operator said in a regulatory filing on Monday (May 6) before the market opened.

According to terms of the lease, the company has the option to renew the lease for a period of three years by notifying JGT no later than six months prior to the expiry of the lease on Dec 22, 2019.

Isetan Singapore noted that it has had discussions with JGT on the lease renewal, but that both parties did not reach an agreement. Therefore, the company has decided not to renew the lease.

"The rationale for the company's decision not to renew the lease is due to both parties not being able to reach an agreement on the renewal terms of the lease favourable to this loss-making store," Isetan Singapore said.

It added that the financial effect on the non-renewal of the lease for the current and future financial years "cannot be reasonably estimated" as at the date of this announcement.

"The decision not to renew the lease is part of the company's ongoing exercise of continuous assessment, realignment and consolidation of its operations to enable better deployment of existing resources among its other business units," Isetan Singapore added.

The counter last traded at $3.10 on May 2, down 0.96 per cent, or three cents.

Isetan Singapore has a market cap of about $128 million, and sits on bond investments worth around $68.5 million, as well as $50.7 million in cash.