Just last week (Dec 2), beauty chain Sasa announced that it will be closing all its 22 stores in Singapore.
In a media statement, Sasa said that the Group’s performance in Singapore “has been less than satisfactory for many years, and has recorded losses for six consecutive years.”
Now, another household name in the local retail scene is waving its white flag.
According to a Business Times report, homegrown DIY chain Home-Fix is also shutting down all its Singapore stores.
It has quietly and gradually closed its stores over the past year, and its last two remaining outlets in Tampines One and Tanglin Mall will close by the end of this week.
It is unknown how many Home-Fix staff will be affected by this move.
But what’s clear is that Home-Fix is facing financial woes. The firm reportedly owes creditors S$19.8 million and is undergoing interim judicial management.
At its peak, Home-Fix had 23 Singapore stores in 2014, but its founder and managing director Low Cheong Kee had ‘right-sized’ it to 16 stores last year.
This meant that the firm closed seven stores for the past four years.
Despite its closure of physical stores in Singapore, Home-Fix will continue to operate its e-commerce platform as well as its home improvement concierge service, Homefix Squad.
Meanwhile, its overseas stores in Cambodia and Malaysia does not seem to be affected as they appear to still be operational.
Why Is Home-Fix In A Financial Fix In The First Place?
Home-Fix started out as a traditional hardware store in 1993. By 2014, it had grown significantly to 23 stores in Singapore and nine in Malaysia.
So what exactly led to its downward spiral?
Some possible reasons could be high costs, increased competition, and the lack of DIY (do-it-yourself) interest in Singapore.
To begin with, DIY stores in Singapore serve a very niche market. Singaporeans simply don’t have the leisure of time to invest in DIY hobbies given their busy schedules.
They would much rather pay for the convenience to hire a professional to fix or assemble things on their behalf.
To be fair, Home-Fix did put in the effort to foster the DIY culture among Singaporeans. It set up an experience centre called XPC to offer workshops that taught customers how to use tools, build furniture, and more.
It was a short-lived venture however, as it closed on 31 October 2019.
This investment probably didn’t pay off as it’s not exactly a sustainable strategy that can help to effectively translate into potential sales.
While it’s a quick-fix solution, it does not nip the problem the bud.
Since they serve a niche market instead of a mass market, there is a need for them to continually engage this targeted group but there is a lack of marketing effort.
Although it runs an online store, it’s not widely-advertised. It has very low visibility, and most customers are not even aware of it.
For an online store, search engine optimisation (SEO) is very important.
For instance, when customers perform a Google search for an Edison lightbulb, Lazada and Hipvan would appear in top search results instead of Home-Fix.
It’s imperative for them to appear on platforms that customers are on so they can be at the top of customers’ minds.
Neighbourhood Hardware Shops Sells Cheaper Goods
On top of having a poor online presence, they are also not doing that great offline.
They face a lot of competition from other stores that offer DIY products at better value.
Large retail chains such as Giant, NTUC FairPrice and Daiso all carry the same products as Home-Fix.
Meanwhile, smaller hardware stores in the heartlands are more conveniently located for consumers and they are able to offer cheaper prices thanks to lower rent.
With increased competition, it is difficult for Home-Fix to have a strong foothold in the market and also sustain its brand positioning.
It tries to cater to more mall-going customers who are more affluent, but are not typically interested in DIY. At the same time, it’s also fighting with lower-cost competitors such as its neighbourhood counterparts.
As its sales take a dip, it doesn’t help that it faces such high mall rentals as well.
What are your personal thoughts on its downfall? Share your comments with us below!
Featured Image Credit: TallyPress
