A LUXURY retailer has been locked out of two of its Orchard Road boutique outlets after running up rental arrears alleged to be worth at least $100,000.
Most luxury brands have stayed resilient and enjoyed healthy sales up till now, despite the slowing economy.
Belbon, the local agent for two top Parisian brands, however, has apparently hit hard times.
A visitor to the first and second floors of the luxury wing of Paragon Shopping Centre will find that Belbon's former outlets for luxury brands Jean Paul Gaultier and Kenzo have been closed to shoppers.
The shops now feature beige hoardings that say: 'Anticipating the new...'
When approached, Paragon told The Straits Times that Belbon had not paid rent for the two stores for at least three months.
It said it had padlocked the stores to 'prevent them from trading further'. Both were already closed as at June 12.
The upscale mall has been chasing Belbon to pay the arrears, but it has yet to receive any payment.
The retailer returned the keys to its landlord only last Thursday.
Paragon's management said the mall might be forced to take legal action against the retailer for breach of contract after Belbon failed to pay 'a six-figure sum' in overdue rentals.
'We have to look at how to mitigate the loss of income,' said a Paragon spokesman. That included seeking new tenants for the vacated store space.
When contacted, Belbon denied that it was in financial trouble - even though it held a warehouse sale at a ballroom in the Royal Plaza on Scotts to clear inventory from the two boutiques over the weekend.
The retailer's general manager, Ms Doris Ho, explained that Kenzo was closed because the principal in Paris had taken back distribution rights for the brand.
She added that Jean Paul Gaultier was shut because Belbon was searching for another location for the brand.
But Paragon told The Straits Times that the leases on both stores would not expire for another year.
The retailer is owned by a low-profile Singaporean known as Mr S.Q. Ong, who has not been quoted in any interviews for at least eight years. The company also runs retail stores in Malaysia and Thailand.
Sources close to the company said Jean Paul Gaultier was a profitable brand for Belbon, but they added that the stock for the luxury brand's spring-summer collection this year had not arrived though it had been expected in February.
Despite defaulting on its rental obligations, Belbon continued to pay its staff, sources said.
Singapore Press Holdings-owned Paragon said Belbon had been a tenant since September 2003, and that this was the first time in five years it had been in default on its rent.
Belbon had been faced with perpetually rising rentals in Orchard Road that, according to CB Richard Ellis, hit a record $54.40 per sq ft a month in the second quarter.
Said Paragon: 'We've lost complete faith in them after they promised cheque after cheque, then failed to produce it each time.
'It has led us to believe they have given up on the business.'
What Paragon says
The mall said Belbon has not paid rent for its Jean Paul Gaultier and Kenzo outlets for at least three months. Both stores were padlocked to 'prevent them from trading further'.
What Belbon says
The retailer denied it was in financial trouble. It said Kenzo was closed because the Paris principal had taken back distribution rights, and that Jean Paul Gaultier was being relocated.
