LONDON — Space NK, the British beauty retailer, is shuttering its business in China, WWD has learned.
The retailer first entered the region in January 2018 across Shanghai, Beijing, Chonqing and Chengdu, with a total of eight stores. On Wednesday, the company confirmed reports that it had closed retail doors earlier this week and let go of staff.
“Over the past two years, we have invested in a multichannel approach to retailing in China. As we constantly evaluate how best to serve and engage with our customers, the uncertain outlook ahead has underlined the importance of acting decisively,” said Andy Lightfoot, chief executive officer of Space NK.
Lightfoot added that China remains a key market for the retailer, although he did not give any details about why it was pulling out of the market or whether the shutdown was linked to a sharp drop in retail sales amid the coronavirus outbreak.
Retail sales in China have dropped by 20 percent over the last two months under lockdown measures from COVID-19. While the country is more or less returning to normal, digital traffic is still higher than foot traffic with shoppers opting to purchase online. According to Kantar Worldpanel, the Chinese beauty business will remain challenging.
As lockdown and quarantine measures continue to be enacted globally, Space NK has diverted its focus to online sales.
“We have seen a strong growth in our online community and a growing trend for Chinese customers to visit our global channels,” he added, stating that Spacenk.com will now service the Chinese market.
At the moment, there are no plans to open on China specific e-commerce channels such as JD.com or Tmall, which is where the vast majority of Chinese consumers shop.
“The simplification allows us to concentrate on our core business and operations while focusing investment on continuing to grow across all key markets, of which China remains one,” Lightfoot said.