Isetan Singapore, the Japanese retailer, has reported a net loss of S$126,000 for the six months ending in June, marking a decrease from a loss of S$681,000 during the same period last year. The announcement was made on August 2. Despite this reduction in loss, the company experienced an 8.9% drop in revenue, totaling S$37.4 million, primarily attributed to declining sales of goods and consignment income within the retail sector. However, this decline was partially offset by increased rental income from the Isetan Wisma Atria investment property.

The retailer’s total costs amounted to S$40.5 million, which represents a 9.1% decrease compared to the previous year. Employee compensation fell by 4.8%, aided by higher government grants, while inventory purchases and related costs saw a 14% reduction due to lower stock loss.

This latest financial update follows a proposal from Japan’s Isetan Mitsukoshi, a major stakeholder, to take Isetan Singapore private at S$7.20 per share. On the trading day prior to the announcement, Isetan Singapore’s shares remained unchanged at S$7.08.

Looking ahead, Isetan Singapore has noted that despite favorable macroeconomic conditions in Singapore, it continues to grapple with challenges in sustaining its recovery momentum post-pandemic, particularly within its retail operations. The company expressed concern that outbound travel, spurred by a strong currency, may lead customers to increase discretionary spending abroad rather than locally.

Additionally, Isetan highlighted “sustained high operating costs” as another hurdle in its pursuit of profitability in the retail segment. Nevertheless, there is optimism regarding its property segment. In April, Isetan Singapore announced that it had executed a new lease for part of the Havelock Road office building it owns, contingent upon the tenant securing necessary approvals from authorities. The company stated, “Should the tenancy proceed, this will be positive for the company’s property segment.”