In 1988, they obtained distribution rights to a line of local sanitary wares and continued to expand with more and more brands until today they have the exclusive rights to distribute some 27 brands of kitchen and bathroom accessory wares in Singapore. Additional retail showrooms have been opened at IMM Building, Balestier Road, and Jalan Besar. This is a rather hot business today as more affluent customers are looking for ways to spruce up their kitchens and bathrooms with looks and performance of accessories. Because it is hot, there are a lot of competitors and margins are squeezed. Service is important, and is the only way to differentiate yourself in this market.
Service is also expensive to supply.
Perhaps the gain in 1999 was only due to short-term incentives from the Singapore government during the economic crisis. They also have to spend a high percentage of their operating profits to service their debt payments. Many web sites also e-retail bath and kitchen accessories today. However, Sim Siang Choon's high debt load, currency risk, exclusivity of brand distribution rights loss risk, dependence on the HDB policies, and low profit margins make this business too risky to compensate for the sector growth potential. The study is offered for informational purposes only and should not be regarded as individual advice or used as the sole basis for any investment decisions.