You must be wondering why we’ve added the word “confirmed” in the headline. Was it even rumoured in the first place?
Back when we couldn’t leave our house to buy a new pair of Adidas shoes, this image went viral:
No media wrote about it because it’s in the hands of the courts, and for all you know, Sportslink could just go to court with a shitload of $50 notes and say, “How much I owe you? Here, count and keep the change!”
The dramatic scene didn’t happen; instead, some Sportslink outlets opened as usual when Phase Two kicked in…
…though some remained closed.
Still, they’ve then made a Facebook post to announce their reopening:
Today, it’s confirmed: the home-grown retail chain is indeed winding up.
Sportslink is Going Out of Business & Even Owed Salaries
It’s reported that since last Friday (3 July), on the day that Adidas and Sportslink have a casual chat in a friendly place known as the High Court, the retail chain has wound up after they accumulated lots of debts to a “substantial number” of creditors.
Usually, for it to reach the High Court, the amount claimed must be over $250,000.
So it’s not just Adidas that’s asking for money.
In fact, they even owed their employees money—according to the liquidator appointed by the court, this includes a month’s salary for employees. He said, “I will convene a creditors’ meeting within the next two weeks to notify them that the company has gone into liquidation, to disclose to them the affairs of the company, and to invite them to file claims.”
To simplify things, just think of it this way: Sportslink is such a big company, they cannot just say they want to shut down like your favourite hawker stall. Well, they can lah if they’ve got no debts.
But big companies would have debts—either due to loans or credit terms.
For example, they might have a credit term of NET60 with Adidas; so Adidas could’ve supplied their shoes to them first, and Sportslink can pay within 60 days.
In the world of business, NET60 is like NET-forever if you’ve never asked for the money.
So, if Sportslink want to wind up, they need to clear all those debts first—if not, they’ll need to sell whatever assets they have to pay off the debts.
And a liquidator is kind of like the person who helps sell those assets and determine which debts to pay off first. If there are extra after selling all the assets, then the extra cash will be given to the shareholders—though there’s usually no extra lah if not fold for what seh.
For a business to fold this sudden (or even fold in the first place since it can be sold), you can bet that creditors can just cry at one corner le. Have you got back your bike-sharing deposits yet?
Home-Grown Business Since 1983
Anyone who remembers how to buy stuff from shops would know about the three key sports retailers in Singapore: Sportslink, Royal Sporting House and World of Sports.
But what you might not know is that Sportslink is a home-grown brand and it was established in the most unlikely places: Queensway Shopping Centre.
While other shops stayed in the popular mall, Sportslink, which was founded by the late Mr Lim Kau Tee as Sports Interlink back in 1983 then, expanded beyond the mall into suburban malls, and by 2015, it has 35 stores and 190 employees.
If you’re my age, you’d know that it’s the go-to for affordable sports products…if you buy your products offline, that is.
No one has seen it coming since earlier this year, when the world was normal, the folks in Sportslink even had yusheng with radio DJs.
Everyone was so happy then.
Not Just a Memory-Filled Place
The retailer doesn’t just have Sportslink as its brand; they’re also the owner of other speciality stores like Hoops Factory, a retailer that focuses on basketballs.
That, too, announced its opening on Phase Two:
This means the liquidator isn’t just going to sell the physical assets the company owns, but intangible assets as well. They said they would also be looking at “all intellectual property assets” the company has.
If that’s confusing, just think of the days when Goody Feed will finally go into liquidation, the day everyone will be cheering: what can we sell except some old laptops, old camera gears and old mics? We can sell our intangible assets, like our Facebook Page, which has a verified blue tick.
These are what are deemed as “intangible assets” since they’re rather precious and take a lot of time to build.
(But lest you’re wondering, no, you can’t buy that tick. It’s just an example.)
By now, you’d be wondering: is it due to Circuit Breaker?
The company didn’t reveal the reason for the closure, but here are some numbers for you to make your own conclusion.
Circuit Breaker Led to 93.4% Decrease in Sales
Because retail sales are seasonal, it’d be more accurate to compare last year’s results with this year’s results.
Overall, in the retail industry, retail shops see a 40.3% drop in sales in April 2020 compared to April 2019, and 52.1% in May 2020 compared to May 2019. I can only guess that it’s not 100% as some are still selling online or can stay open (i.e. essential businesses).
But if we zoom into the specific categories, it’ll look worse.
We’re going to put Sportslinks as “Department Stores”.
For that, these retailers see a 82.3% drop in sales in April 2020 compared to April 2019, and a whopping 93.4% drop in May 2020 compared to May 2019.
The tiny percentage of sales could’ve come from online sales, but Sportslinks online store isn’t open.
So if they’ve already faced financial difficulties even before the COVID-19 hit, we can safely say that the Circuit Breaker is the final nail in the coffin.
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