SINGAPORE: Isetan Singapore will not renew the lease for its "loss-making" store at Westgate mall, the company announced in an SGX filing on Monday (May 6) before the market opened.
The Japanese department store operator said its lease with JG Trustee (JGT) will expire on Dec 22 this year, after both parties were unable to reach an agreement on the lease renewal terms.
"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," said Isetan Singapore.
Under the 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 before the expiry of the lease.
"The company has had discussions with JGT on the renewal of the lease, but both parties did not reach an agreement on the renewal of the lease. The company thus decided not to renew the lease," said Isetan Singapore.
This decision 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, said the company.
It added that the decision's financial effect for the current and future financial years "cannot be reasonably estimated at the date of the announcement".
Shares of Isetan Singapore opened slightly higher on Monday at S$3.16 from S$3.10 at its previous close on May 2.
Isetan Singapore has a market capitalisation of about S$128 million. The company opened its store at Westgate in 2013.