BT : Courts takes on Orchard Rd

Business Times - 13 May 2010

Courts takes on Orchard Rd

New 8-level store at Somerset a timely move ahead of IPO

By ARTHUR SIM

COURTS, which has a strong presence in the heartlands, has decided to open a high profile store on Orchard Road - and just in time to raise its profile for its upcoming IPO too.

A market leader in electrical, IT and furniture retail, Courts' only store in the city is at Funan Centre. But this looks set to change.

Courts Asia, which has 55 retail stores in Singapore and Malaysia, lodged a preliminary prospectus for an initial public offering (IPO) in Singapore in March. CEO Terry O'Connor said that the opening of the eight-level Orchard Road store would be 'timely', and the new store will create 'brand presence'. However, he also added that it would have gone ahead with the new store regardless of the IPO. 'The (Orchard Road) store has a low breakeven,' he added.

Mr O'Connor did not reveal the rental but earlier reports put the estimated rent at $443,150 per month. This roughly works out to $10 psf.

While prime Orchard Road might easily be three times as much, Mr O'Connor said that the rental will include a component that is based on the store's gross turnover. But this only kicks in at level 'where we are already comfortable,' he explained.

While he did not comment on the progress of the IPO, he did say that the IPO roadshows with potential investors were still on-going. It was earlier reported that the IPO could raise over $150 million.

Mr O'Connor was speaking at a media briefing for its new store, which will be located in a 44,000 sq ft building owned by OG and recently vacated by John Little. It is opposite 313@Somerset and Orchard Central.

On how Courts fits in with Orchard Road, Mr O'Connor said he believes Singapore's most famous shopping street has become more 'polarised' of late, with the area closer to Scotts Road more 'upscale' compared to the more 'middle and mass-market' area closer to Cavanagh Road.

'Our core competition also have stores in the city,' he added.

Mr O'Connor said it would be prepared to tweak its retail concept for Orchard Road if needed. Already, Courts plans to roll out a new retail concept called Brand Connectivity which will focus on new technology in electrical and IT products.

For Orchard Road, Courts is also working with Apple to create a dedicated retail area that looks set to open in time for the launch of the highly anticipated Apple iPads in July. Mr O'Connor said Apple is likely to occupy the prime space on the ground facing Orchard Road.

Not to disappoint its core customers, Courts at Orchard Road will kick off with a sale starting May 19. It will officially open in July.

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