LONDON — China’s retail environment has proven challenging for foreign retailers. One day after France’s Carrefour sold 80 percent stake of China’s Suning.com, Japanese high-end department store operator Takashimaya said it would close its Shanghai store on Aug. 25, and shift its focus to the Southeast Asian market.
Founded in 1831 as textile seller, Takashimaya evolved into one of the biggest department store chains in Japan, with 17 points of sales its home country and one store each in Singapore, Thailand and Vietnam.
It entered China in 2012 by opening a grand department store in Shanghai’s Gubei area, where affluent Japanese and South Korean immigrants are concentrated. The store features Japanese luxury and premium clothing and skin-care brands, as well as a wide selection of Japanese restaurants and a supermarket.
The company cited “unexpected structural change in consumption, stiff competition and weak physical retail” as reasons for the closure. The store posted a loss for the seventh consecutive years in 2018.
According to Bedi Ye, chief marketing officer of DFO showroom and a Chinese fashion industry observer, “Takashimaya came to China a bit too late. It took them 10 years from making the announcement to opening the actual store. They missed the luxury boom and they chose the wrong location. Even for a world-class city like Shanghai, there are only three to four luxury hot spots and they are in Nanjing Road West, Huaihai Road East and Lujiazui, not Gubei.”
The U.K.’s Marks & Spencer, America’s Macy’s and South Korea’s Lotte Mart have all exited the Chinese market despite great ambitions at the outset, citing misjudgment of the market and competition from local players such as Hualian, Vanguard, Suning and Bailian.