Robinsons Has Debts of Nearly $32 Million; Creditors Include Singtel & Mattress Companies

By
Zhi Hao
-

Earlier this month, department store stalwart Robinsons announced their imminent closure, after 162 years of operations here in Singapore.

To mark the occasion, they also unveiled a huge closing-down sale, which people attended in huge proportions.

Alas, it appears that the Coronavirus has claimed another victim.

But here’s the thing; just how bad was Robinson’s situation, that they had no other choice but to close down their entire generation-spanning franchise altogether?

Well, as it turns out…

It was a rough $32 million debt bad.

Robinsons Has Debts of Nearly $32 Million; Creditors Include Singtel & Mattress Companies

According to The Straits Times, Robinsons is believed to owe at least $31.7 million to more than 440 creditors.

The revelation was unveiled when provisional liquidator KordaMentha sent a notice to creditors on 13 November 2020.

Apparently, potential employee claims alone accounted for around $4.4 million.

Meanwhile, Robinsons owes the largest individual amount, a cool $7.2 million, to Swee Cheng Holdings – the landlord of Robinson’s Heeren outlet.

It also owes around $4.2 million each to Lendlease Retail Investment 3 and an entity connected to RCS Trust. The former is the landlord of Jem Mall, while RCS Trust owns Raffles City Shopping Centre.

According to the news report, mattress companies are included among the listed 442 creditors.

These include the likes of Simmons, Sealy, Serta and Tempur.

Other creditors include Singapore Post, Singapore Press Holdings and Singtel.

Liquidation

On 30 October, Robinsons announced that it will be liquidating its Heeren and Raffles City stores.

Reasons include a change in consumer preferences, and cost pressures such as rental expenses.

The Covid-19 pandemic was purportedly a factor in the decision as well.

Previously, in August, Robinsons had also shut down their store at JEM, citing reasons that “having multiple large-scale destination department stores was no longer a sustainable option” for them in the Singapore context.

According to a statement by the company, this tough decision was made after considering the company’s “inability to continue operations due to weak demand at department stores”.

KordaMentha is set to handle Robinson’s assets, and will determine the optimal solution to maximise returns to creditors.

Following news of its liquidation, at least 11 former Robinsons employees have sought help from the Ministry of Manpower (MOM) and the Tripartite Alliance for Dispute Management.

“They are uncertain about payment of retrenchment benefit, salary-in-lieu of notice and encashment of unconsumed annual leave,” said an MOM spokesman.

Apparently, all Robinsons employees have since been paid their October salaries.

According to the Insolvency, Restructuring and Dissolution Act, each employee can receive up to S$13,000 from the liquidator.

“Claims in excess of $13,000 will be separately assessed by the liquidator together with filings from other creditors,” the MOM said.

Lawyers have said that in the event of a company winding down, creditors such as banks or former employees will be the first to get paid.

Customers are deemed to be the last in line.

Robinsons’ senior general manager, Mr Danny Lim, said that the outcome was regretful, and despite Robinsons’ efforts to pursue the brand’s success, the changing consumer landscape as an industry challenge has made it difficult for long-term success. Furthermore, the COVID-19 pandemic has also made this challenge even tougher.

“We have enjoyed success over the years, and it has been an honour for Robinsons to serve the Singapore market,” he commented.

“I am grateful for the dedication of our team, and for the support shown by our customers over the years.”

Featured Image: TK Kurikawa / Shutterstock.com

Here’s a simplified summary of the South Korea martial law that even a 5-year-old would understand:

Read Also:

Advertisements
 
Zhi Hao
Email: [email protected]