Metro to Close Paragon and Causeway Point Stores for Strategic Shift

Strategic Repositioning at Paragon and Causeway Point

Metro Holdings confirmed in a July 20 Singapore Exchange filing that it will shutter its physical department stores at Paragon and Causeway Point as their respective leases come to an end. The decision follows a board-led review of the company’s retail business, which has operated in a challenging operating environment as consumer expectations have become fundamentally different from years past.

While the company has not provided a specific timeline for the closures, the shift signals a departure from the traditional, large-format department store model that has defined the brand for decades. Metro chairman Tan Soo Khoon emphasized the need for the company to evolve alongside a transforming retail landscape. According to the company, the board believes this move will facilitate long-term growth by creating an agile platform capable of adapting to changing consumer habits.

Shopper Reactions and the Appeal of Physical Retail

For many loyal customers, the news of the impending closures has been met with disappointment. At the Paragon outlet, which opened its doors in December 1987, shoppers expressed a preference for the tactile experience of browsing in person rather than shopping online.

“Online shopping is not for us. We prefer to be there in person,”

Boon Kiat, retiree

Boon Kiat added that he and his wife get their bedsheets, kitchenware and appliances from Metro, and that they will have to find another option.

Other patrons, such as HR professional Veronica Chan, cited the department store as a source of comfort. Looking at what they have on offer and thinking about whether I want to buy it is therapy for me. It will be sad to see this Metro go away, she said. The sentiment is shared by some tourists, who Straitstimes said they view the store’s extensive offerings as a significant loss.

The Competitive Pressure of Online Pricing

The transition reflects a broader struggle among physical retailers to compete with lower prices found on digital marketplaces. Checks conducted on July 21 highlighted significant price disparities between Metro and online platforms like Shopee. For instance, a Tefal Easy Air Fryer Steam and Grill retailed for $269 at Metro, while the same item was priced at $228 on Shopee. Similarly, an Iris Ohyama standing fan was listed at $249 at the department store, more than double the $120 price found on the brand’s official Shopee store.

Despite these price gaps, some shoppers maintain that the ability to assess product quality in person remains a key reason to visit physical stores. I just come here once in a while instead of buying appliances online because I can still feel the quality of the products in person, said a shopper named Koh, who visits the Causeway Point location.

Future Outlook and Financial Implications

Metro is currently evaluating new retail strategies, including smaller-format stores, multi-speciality concepts, and pop-up initiatives. The company’s CEO, Yip Hoong Mun, stated that the refreshed retail strategy is designed to meet customers’ evolving expectations while having greater flexibility to introduce new concepts, brands and partnerships. Reports suggest the company is in discussions to remain at Paragon under these new concepts.

Financially, the company is still assessing the impact of this transition. The board does not expect the closure move to have a material effect on the group’s consolidated net tangible assets or earnings per share for the financial year ending March 31, 2027. Shares of Metro closed at $0.46 on Monday.

The company, which previously closed its Centrepoint flagship in 2019, intends to continue pursuing growth through Grand Brands Asia, its joint venture focused on international retail brands. Metro has promised to provide further updates as the implementation of its new retail strategy develops.

Sources: CNA.