Furniture chain VHive shuts, with plans to go to higher Levels

When furniture retailer Vhive realised that it was losing business to online rivals, its management decided that it could not sit tight and hope for the best.

Instead, it closed the last of its stores last month, spelling an end to a decades-long run that started in the 1990s.

Now, the company is aiming to spring back online with a new brand called Levels Living, starting this month and run by the co-founder of Vhive, Mr Michael Song, 62, and his son-in-law, Mr Thomas Ding, 33.

Hoping to continue Vhive's legacy, it will still sell furniture but is expanding its product range to include more home furnishings, such as cookware and home decor.

Mr Ding, who is managing director of Levels, told The Straits Times that a factor behind Vhive's closure was increasing competition from newer entrants that could leverage online channels to boost sales. Another obstacle was mounting rental costs. At one point, about 40 per cent of its sales was used to pay rent for its retail outlets and warehouse.

Mr Ding said: "Vhive was a very traditional business, and that was one of the major roadblocks, because you have (all these newer) companies coming in.

"Though they were small when Vhive was considered an incumbent, they were slowly nibbling at the market share."

E-commerce sites such as Taobao, widely seen as a source of cheaper furniture, also started eating away at the pie.

As profit margins started to erode, Vhive closed its retail shops, mostly in shopping malls, gradually. On April 15, it closed its last outlet at IMM in Jurong.

The brand was started in the 1990s by Mr Song and his brother, Mr Felix Song, now 72. It was incorporated in 2016.

When the older sibling decided to retire a few years ago, the younger Mr Song contemplated doing the same, and spoke to Mr Ding, asking for his advice.

By about 2020, Vhive had about six retail stores left, compared to its peak when it had about 15 in places such as Plaza Singapura and Suntec City.

Mr Ding, who was doing his PhD in digital entrepreneurship at the University of Edinburgh, told his father-in-law that it would be a waste to end the brand's legacy. He had not been involved in running Vhive but had helped out occasionally.

After he completed his PhD earlier this year, he returned to Singapore to start Levels with Mr Song.

Most of the Vhive staff had to be let go, with about four retained to join Levels.

Levels, which took most of the unsold furniture from Vhive, will also be using the same suppliers.

"A new brand would allow us to have more room to market our new range of products and reach new demographics," said Mr Ding, adding that Vhive was primarily known for selling furniture like sofas and cabinets.

Unlike Vhive however, which focused on expanding via physical stores, Levels will mainly operate online, though there are plans to start a physical outlet by early next year.

Being mostly online will allow the brand to have a greater reach, especially to younger consumers.

Apart from buying from the website, customers can also do so on e-commerce platforms like Shopee and Lazada.

But going online also comes with some perils. Last year, Vhive's server was hacked, which led to customers' personal information such as phone numbers and physical addresses being leaked online.

With operations now moving online, Mr Ding said steps have been taken to beef up cyber security at Levels. For example, he chose to launch the website using a third-party platform, Shopify, which follows a set of security standards to protect and handle credit and debit card information.

Keeping operations mostly online will also help to keep expenses low, especially with the industry facing higher shipping and raw material costs.

Describing the closure of Vhive as "bittersweet", Mr Ding said: "After all, it's years of hard work and there's the nostalgia. But my father-in-law also realises that the retail landscape is changing faster with digitalisation and rising costs, and we should learn and adapt."