SINGAPORE — Yet another household name is being struck off the retail map here.
Just a week after beauty products chain Sasa announced its exit from Singapore, homegrown hardware store Home-Fix is also folding its physical stores as the changing retail landscape claims another victim.
Retail experts told TODAY that high costs, keen competition and the absence of a large enough consumer base interested in Do-It-Yourself (DIY) work for home improvement and repairs were contributing factors to its closure.
The Business Times first reported yesterday that Home-Fix, which sells DIY home-repair tools and products, will be shutting its brick-and-mortar stores by the end of this week.
When TODAY went down to its two remaining stores, the shutters were already down at the Tanglin Mall outlet and employees at its Tampines One branch were seen packing and clearing products off the shelves.
Staff members at both outlets declined to speak when approached. It is unclear how many workers would be affected by the closure of its physical stores. TODAY has reached out to the retailer for comments.
At its peak, the DIY chain had more than 20 outlets.
Associate Professor Lawrence Loh from the National University of Singapore (NUS) Business School said that the shutting of Home-Fix is a warning sign for other DIY stores in Singapore, such as Selffix and Horme Hardware.
“They are all in the same boat. We are just seeing the beginning. They have to be rigorous in how they maintain their internal controls and cash management, and keeping in tune with marketplace changes. It’s a good lesson for them.”
Analysts agreed that DIY stores in Singapore are a very niche market because there is a lack of DIY culture among consumers in Singapore, compared with countries such as the United States, Australia or New Zealand.
The hectic schedules of Singaporeans are not consistent with the kind of lifestyle that a DIY shop is trying to promote, Assoc Prof Loh said.
Home-Fix has tried to cultivate a DIY habit among consumers by collaborating with bespoke makers and designers to conduct training courses.
However, Samuel Tan, course chair of the retail management diploma course at Temasek Polytechnic, said that the strategy was not effective in translating into potential sales.
It does not help that most Singaporean households now are made up of two working adults.
Lucas Tok, retail lecturer at Singapore Polytechnic, said: “In that kind of environment, if something needs to be fixed at home, you’re going to find a professional service provider to do it for you rather than DIY.”
Low visibility of online business
The analysts said that Home-Fix would need to zero in on a very niche group of consumers instead of the mass market, but it did not manage to engage even this target group due to a lack of marketing effort.
While the chain has tried to innovate by beefing up its online presence with the launch of Try In Store Buy Online (Tisbo) in December last year, Tan of Temasek Polytechnic said that its website has low visibility and consumers are not aware of it.
“The online business could have placed a higher focus on big-ticket items to draw in the shoppers. The lack of engagement between its online and offline platforms could have resulted in missed sales opportunities as well.”
Tok of Singapore Polytechnic said that Home-Fix has not managed to become more visible and to penetrate a typical shopper’s experience as an online user.
“The way consumers shop now is very different. It starts off with going to an online search engine for much of its target audience,” he said.
A simple Google search of an Edison lightbulb would bring up Lazada and Hipvan in its search results, for example, and not Home-Fix.
“(It should have asked itself), ‘Am I on these channels they are searching for? If I’m not, it’s time I need to be on these channels’,” he added.
While its physical stores will shut, Home-Fix’s online store is still running and Tok said that it is not game over yet for Tisbo as long as it is able to market itself to the right target consumers and bring in better-value products than its online competitors.
Competition with online businesses aside, the analysts said that Home-Fix has to contend with other stores that offer DIY products at better value.
Large retail chains such as Giant, NTUC FairPrice and Daiso are selling the same products as Home-Fix and they have the economies of scale due to their size.
Smaller hardware stores located at public housing blocks are more conveniently located for consumers and offer cheaper prices.
That is because they pay lower rent, compared with Home-Fix outlets which are located in malls, the experts said.
“With competition all around, Home-Fix is unable to sustain its brand differentiation over the years and may have lost customers to other competitors. It has failed to sustain its brand positioning in the marketplace,” Tan said.
Assoc Prof Loh of NUS Business School observed that Home-Fix’s market positioning may have been problematic.
On one hand, it tries to cater to more affluent consumers in malls who are typically not interested in DIY. On the other hand, it is fighting with lower-cost competitors which are the neighbourhood hardware stores in housing estates.
Assoc Prof Loh added that weak internal controls in cost management is also probably one reason why the retail chain has been owing creditors money since April and chalking up almost S$20 million (RM61 million) in liabilities, as reported by The Business Times.
A comeback with other services
While Home-Fix founder Low Cheong Kee is reportedly looking to make a comeback through other services it offers, such as training courses and home repairs, the analysts said that they are not too sure whether this strategy would work.
Assoc Prof Loh said that it is a quick-fix solution that does not get to the root of the problem.
Tok and Tan agreed that the idea of conducting training courses is in line with consumer trends, but whether they will be sustainable will really depend on how these courses are pitched.
Positioning these courses as part of the global “go green” movement is one way to gain more participants and may translate to potential sales, Tan said.
“The reasons for attending the training courses would serve a larger purpose. For example, customers can attend a course to be DIY-oriented, in order to save the environment. At the same time, they can save money since labour cost (for engaging a repairman) is high.” — TODAY