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Thursday 14 May 2009
Sincere may tick back full circle to old hands
Mr Tay: Sold Sincere to HK-based Peace Mark in December 2007 for $530 million, but Sincere was put up for sale again last October after Peace Mark was wound up
Former owner Tay Liam Wee and LVMH group in the frame to buy watch retailer
By JAMIE LEE 14 May 2009
(SINGAPORE) Sincere Watch could find itself back in familiar arms, amid market talk that former owner Tay Liam Wee may buy back the company with LVMH Group.
Mr. Tay sold Sincere to Hong Kong-based Peace Mark in December 2007 for $530 million. But Sincere was put up for sale again last October after Peace Mark was wound up for its failure to repay a multi-million-dollar bank debt.
Since then, no buyer has been found for Singapore’s biggest watch retailer.
It is unclear whether LVMH - which is fairly active in the local watch market - would take a direct stake in Sincere, or an indirect stake through Chinese company Xinyu Hengdeli.
LVMH owns about 7 per cent of Xinyu, China’s biggest watch retailer, which holds exclusive distribution rights to LVMH watch brands Christian Dior, TAG Heuer and Zenith in China.
Xinyu also distributes the Tissot, Longines, Omega and Rado watch brands, which are owned by another substantial shareholder, Swatch Group.
Temasek Holdings was once a substantial shareholder in Xinyu. It bought a near-10 per cent stake in 2006 but began paring its holding about a year later.
Market watchers have said The Hour Glass has also expressed an interest in buying Sincere, a move that would boost its buying power with brand owners.
Sincere has been on the shelf amid the severe economic downturn that has crimped retail spending. Singapore’s retail sales dropped 5.7 per cent in February to $2.4 billion compared with the same period a year earlier - a fifth straight monthly fall.
Retailer FJ Benjamin Holdings sank into the red in its third quarter ended March 31. It posted a net loss of $1.86 million for its Q3, reversing from a $4.36 million net profit a year earlier. Sales from its watch business sank 24 per cent to $19.4 million, with sharp falls in South-east Asian markets and Taiwan.
The Hour Glass reported a quarterly net loss of $7.08 million - its first quarterly loss in 10 years - for the three months ended Dec 31, 2008, versus a net profit of $8.21 million a year earlier. This was due to an investment impairment charge. Revenue fell 12 per cent to $116 million from $132 million a year ago.
In its last financial report, Sincere posted a 6.53 per cent dip in full-year net profit to $21.6 million for the 12 months ended March 31, 2008.
Liquidators in charge of Sincere’s sale did not respond to BT queries. And former owner Mr. Tay could not be contacted.
Questions have been raised, meanwhile, over whether Sincere will open a new store at the upcoming Ion Orchard, although Ion has doused speculation that Singapore’s largest watch retail chain is pulling out.
Ion has been shaping up as a battleground for the three local watch players. There has been no three- way clash at any glitzy mall so far, a check of the companies’ websites shows. The only mall where all three have stores is Lucky Plaza.
But Ion - jointly owned by CapitaLand and Hong Kong’s Sun Hung Kai Properties - has rejected talk of Sincere pulling out. ‘Sincere Watch remains a tenant at Ion Orchard,’ a spokesman said.
Negotiations are going on over the concept of Sincere’s store, he said. But he would not say whether these involve the final amount of space to be taken up.
Sincere declined to comment when contacted.
Ion said last week that 12,000 sq ft of space will be taken up by watch retailers. They include IWC Schaffhausen, LVMH’s TAG Heuer, and local players The Hour Glass and Cortina Holdings.
The Hour Glass will take up 2,400 sq ft, executive director Michael Tay told BT. Half of its ground-floor space will be for a Rolex flagship store on Orchard Road. The other half will be for a concept store: ‘L’Atelier by The Hour Glass’.
Apart from representing brands such as A.Lange & Sohne, Breguet and Audemars Piguet, The Hour Glass will exclusively represent independent manufacturers such as Urwerk and Max Busser & Friends.
Cortina will take up a total of about 1,900 sq ft at Ion Orchard, a spokeswoman said.
This will include a multi-brand boutique on the third floor and a separate Patek Philippe store, she said.
Ion is understood to be charging rent of between $70 and $80 per sq ft. But it said in March that it has offered a discount of up to 30 per cent on base rents.
These rebates - which will run until the end of October - exclude the 40 per cent property tax rebate the developer will pass on to all tenants.
1 comment:
Sincere may tick back full circle to old hands
Former owner Tay Liam Wee and LVMH group in the frame to buy watch retailer
By JAMIE LEE
14 May 2009
(SINGAPORE) Sincere Watch could find itself back in familiar arms, amid market talk that former owner Tay Liam Wee may buy back the company with LVMH Group.
Mr. Tay sold Sincere to Hong Kong-based Peace Mark in December 2007 for $530 million. But Sincere was put up for sale again last October after Peace Mark was wound up for its failure to repay a multi-million-dollar bank debt.
Since then, no buyer has been found for Singapore’s biggest watch retailer.
It is unclear whether LVMH - which is fairly active in the local watch market - would take a direct stake in Sincere, or an indirect stake through Chinese company Xinyu Hengdeli.
LVMH owns about 7 per cent of Xinyu, China’s biggest watch retailer, which holds exclusive distribution rights to LVMH watch brands Christian Dior, TAG Heuer and Zenith in China.
Xinyu also distributes the Tissot, Longines, Omega and Rado watch brands, which are owned by another substantial shareholder, Swatch Group.
Temasek Holdings was once a substantial shareholder in Xinyu. It bought a near-10 per cent stake in 2006 but began paring its holding about a year later.
Market watchers have said The Hour Glass has also expressed an interest in buying Sincere, a move that would boost its buying power with brand owners.
Sincere has been on the shelf amid the severe economic downturn that has crimped retail spending. Singapore’s retail sales dropped 5.7 per cent in February to $2.4 billion compared with the same period a year earlier - a fifth straight monthly fall.
Retailer FJ Benjamin Holdings sank into the red in its third quarter ended March 31. It posted a net loss of $1.86 million for its Q3, reversing from a $4.36 million net profit a year earlier. Sales from its watch business sank 24 per cent to $19.4 million, with sharp falls in South-east Asian markets and Taiwan.
The Hour Glass reported a quarterly net loss of $7.08 million - its first quarterly loss in 10 years - for the three months ended Dec 31, 2008, versus a net profit of $8.21 million a year earlier. This was due to an investment impairment charge. Revenue fell 12 per cent to $116 million from $132 million a year ago.
In its last financial report, Sincere posted a 6.53 per cent dip in full-year net profit to $21.6 million for the 12 months ended March 31, 2008.
Liquidators in charge of Sincere’s sale did not respond to BT queries. And former owner Mr. Tay could not be contacted.
Questions have been raised, meanwhile, over whether Sincere will open a new store at the upcoming Ion Orchard, although Ion has doused speculation that Singapore’s largest watch retail chain is pulling out.
Ion has been shaping up as a battleground for the three local watch players. There has been no three- way clash at any glitzy mall so far, a check of the companies’ websites shows. The only mall where all three have stores is Lucky Plaza.
But Ion - jointly owned by CapitaLand and Hong Kong’s Sun Hung Kai Properties - has rejected talk of Sincere pulling out. ‘Sincere Watch remains a tenant at Ion Orchard,’ a spokesman said.
Negotiations are going on over the concept of Sincere’s store, he said. But he would not say whether these involve the final amount of space to be taken up.
Sincere declined to comment when contacted.
Ion said last week that 12,000 sq ft of space will be taken up by watch retailers. They include IWC Schaffhausen, LVMH’s TAG Heuer, and local players The Hour Glass and Cortina Holdings.
The Hour Glass will take up 2,400 sq ft, executive director Michael Tay told BT. Half of its ground-floor space will be for a Rolex flagship store on Orchard Road. The other half will be for a concept store: ‘L’Atelier by The Hour Glass’.
Apart from representing brands such as A.Lange & Sohne, Breguet and Audemars Piguet, The Hour Glass will exclusively represent independent manufacturers such as Urwerk and Max Busser & Friends.
Cortina will take up a total of about 1,900 sq ft at Ion Orchard, a spokeswoman said.
This will include a multi-brand boutique on the third floor and a separate Patek Philippe store, she said.
Ion is understood to be charging rent of between $70 and $80 per sq ft. But it said in March that it has offered a discount of up to 30 per cent on base rents.
These rebates - which will run until the end of October - exclude the 40 per cent property tax rebate the developer will pass on to all tenants.
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