EPICENTRE - where queues used to form when Apple launches new products - is throwing in the towel and selling all four of its Singapore storefronts, as well as its online store to a rival Apple reseller for just S$516,275.
Catalist-listed parent EpiCentre Holdings, the parent of EpiCentre Pte Ltd, announced on Tuesday that it has entered a conditional sale and purchase agreement with Elush (T3), which runs iStudio.
With the sale, EpiCentre will also exit the Apple Authorised Reseller and Apple Premium Reseller business in Singapore, subject to the approval of EpiCentre Holdings' shareholders at an upcoming extraordinary general meeting.
Its outlets are located at ION Orchard, Wheelock Place, Marina Bay Sands and Bugis Junction. EpiCentre will also grant Elush (T3) the licence to use its trademarks "EpiCentre" and "Live Out Loud by EpiCentre" with no fees chargeable.
EpiCentre Holdings cited competition from other Apple Premium Retailers and the Apple store at Orchard which opened last year for exiting the business, adding that sales have been adversely affected since the opening of the latter.
It also said Apple intends to open more retail stores in Singapore. "With Apple's upcoming plan, the company has decided to dispose of the business and focus on its beauty, wellness and lifestyle business while looking at other possible related businesses."
EpiCentre's status as an Apple Premium Reseller expired in April 2018 and was not renewed, it said.
Expiry of the Premium Reseller licence would mean higher renovation costs, an impact on its sales and the inability to obtain stocks directly from Apple - which would result in higher costs and potentially lower profit margins if it were to obtain stocks from other authorised distributors.
EpiCentre will continue its business as an Apple Authorised Reseller in Malaysia and focus on its hair removal and skin rejuvenation business under Japan IPL Holdings which it bought a 51 per cent stake in 2017 for S$3.06 million.
EpiCentre Holdings will use the proceeds from Elush to pay suppliers.
The company's Apple business began life in 2002 when four friends pooled S$500,000 to open a store at Wheelock Place. It won Apple's Best Point-of-Sale in Asia 2006 award, and as AFOR Pte Ltd, listed on the Catalist board in early 2008 with one other store at Suntec City in hand.
It scooped up industry awards along the way and expanded to Malaysia and China. It was the overall winner in the Promising Brands category at 2010's Singapore Prestige Brand Award (SPBA.)
For the first half of its FY2011 ended Dec 31 2010, it booked a half-yearly profit of S$4.7 million with revenue at S$92.1 million, and in FY2013, it had as many as 18 outlets.
But other rivals in Singapore emerged along the way, including Elush Retail, which was appointed an Apple Premium Reseller in 2007. It now has eight iStudio stores: three within Changi airport, some in Orchard Road and one in Sengkang. Nubox, which was set up in 2008, now has 10 stores.
According to its financial statements from FY2013 and onwards, it was hit by price competition, store closures and lacklustre consumer sentiment. Its sales mix was also primarily comprised of Apple products as opposed to third party brand products, which it said affected gross profit margin along with its bundling and promotions.
In the half year ended December 2017, the business at EpiCentre's four stores and online store suffered a pre-tax net loss of about S$55,000, EpiCentre disclosed last night.
Its shares dipped 0.2 Singapore cent to close at S$0.052 on Tuesday before the announcement was made.