Years of losses, suffering from the seven-year itch
On the evening of June 25, Japans Takashima House Department Store announced that it would liquidate and dissolve its overseas subsidiary, Shanghai Takashima House Department Store Co., Ltd. and hold a relevant temporary shareholdersmeeting on August 25. The store is scheduled to close on the same day.
At noon on August 23, Shanghai Gaodaowu Department Store Co., Ltd. announced that it would continue to operate normally after August 25 because of the support of property owners and the assistance of relevant departments in Shanghai and Changning District. The goal of quality department stores is to contribute to regional development.
Recently, a reporter from the Cathay Times saw in Gaodao House, Shanghai, that the shopping mall was doing its best to promote sales, and the B1-7 floors were covered with sales billboards. In addition to the B1 storey supermarket and some brands still maintain the original price, most brands discount strength at 3-7 discounts, some brands discount even as low as 1 discount. The attraction of large discounts has led to a surge in passenger flow in Shanghais Takashima House, which is famous for its quietness. Consumers who come to pick up leaks are running shoulder to shoulder. However, the reporter of China Times also noticed that despite the great efforts of discount promotion, many brands have higher original prices, and even if the discount is as low as one percent, few people pay attention to it.
In a womens clothing store on the third floor, the shopkeeper told reporters that, in fact, two or three months before the closure of the store was notified, there was a rumor that the store was about to close down inside the Gaodao House in Shanghai and among the merchants. Shortly after the announcement of the closure of the store, it cancelled the lease with Kashima House, and has now found a new store site, to go to more places with more traffic. But she also admits that it takes a long time for a store to reopen from site selection, decoration to reopening, and reopening will certainly affect the customers accumulated before.
Some customers expressed their regret for the announcement of Takashima Houses departure. However, some consumers confessed to reporters that they had not come to Gaodao House in Shanghai before, and even did not know the existence of this store. If they did not want to pick up cheap they would not go there specially.
According to the official website, Takashima House, founded in 1831, currently has 20 stores in Japan. In December 2012, it opened its first Chinese mainland store in Gubei District of Shanghai (Taipei Daye Takashima House, China, opened in 1994). The store is located in the second phase of the Fortune Center of Gubei New Area, with a total floor area of 60,000 square meters and 1 to 7 floors underground and above ground. Similar to most Takashima department stores in Japan, Shanghai stores are mainly luxury and high-end brands, introducing Japanese high-end makeup brands C.P.B, POLA and some high-end Japanese clothing brands, as well as imported supermarkets and organic restaurants. It is worth mentioning that, in terms of consumer experience, Shanghai Gaodao House stands out as a flock of chickens in the industry, especially the details of toilets, mother and baby rooms and other facilities, which are highly praised by consumers and the industry.
Why did such a fairly high-end store come close? Gaodao House in Shanghai admitted that this is because since its opening in December 2012, it has been working hard, but it has been extremely difficult for the stores to continue to operate because of the unexpected changes in the consumption structure, the intensification of industry competition and the low consumption of physical stores.
According to Hiroshi Suzuki, president of Takashima House Group, in an interview with the media in September 2013, From the current operating data, we are in a critical state. At that time, it revealed that due to the severe retail situation, the sales target of Shanghai Takashima House in the first year has been lowered from 13 billion yen (about 1 billion yuan at the current exchange rate) to 8 billion yen, and then again to 5 billion to 6 billion yen, striving to make profits within five years, I believe that losses can be turned into profits within 10 years.
In order to reverse the decline, Shanghai Gaodao House began to adjust its management and brand in 2013, and made a lot of localization attempts. For example, to increase Lancome, Manji desserts and other well-known brands of the public; introduce services such as childrens clubs, mother and baby rooms, and strengthen marketing. Takashima House also hopes to strengthen e-commerce with the help of Shanghai Takashima House, and says it will consider locating sites in other cities in mainland China in the future.
Nevertheless, Gaodao House in Shanghai has not yet made profits as expected. According to the information released by Takashima House, in the past three years, Shanghai Takashima House has been in a long-term loss state. From fiscal year 2017 to fiscal year 2019, its operating profit lost 59.76 million yen, 68.6 million yen and 52.07 million yen respectively. As for the reasons for the delay in achieving profits, Takashima House explained that it was mainly caused by fierce competition in the industry and delays and changes in the development of adjacent commercial facilities.
Unacclimatized, Foreign-funded Department Stores Frequently in Dilemma
Many insiders believe that the main reason for the poor operation of Takashima House in Shanghai is that in recent years, the real retail collective represented by department stores has declined, while the high-end positioning of Takashima House does not match the location of community-based business circles, and the operation and management of the company is not localized enough.
Zhou Changqing also pointed out that the location of Gaodao House in Shanghai is high-end but located in the ancient north of non-municipal business circle, which has caused the congenital deficiency: As the first project expected by all parties in mainland China, Gaodao House must be relatively high-end positioning, with a view to building radiation for the whole citys passenger group by virtue of brand effect and excellent quality of the project. Power. However, due to the geographical location, regional business level and the characteristics of consumer groups, it is difficult for a single project to leverage the potential energy of the business circle. Returning to community business positioning is faced with high cost and difficult adjustment. Zhong Ruihuan, Director of the Retail Real Estate Services Department of Gaoli International East China, also believes that the radiation scope of the Hongqiao area, where Gaodaowu Shanghai store is located, is partial to the region and not the core business circle, which leads to a departure from the consumers who it initially wanted to attract to the whole of Shanghai.
In the interview, a consumer who lives in the ancient North told the Huaxia Times that Gaodaos house is small in volume and can be said to be a community business, but it has a high brand price and is not well known in China. In the past few years, he has only consumed catering in Takashima House. The catering is really good, but if you want to buy a Japanese brand, you will fly directly to Japan.
It is worth mentioning that Zhou Changqing also pointed out that the localized operation and management of Takashima House in China is not in place. During his stay in China, Shanghai Takashima House made personnel adjustments, but the first person in charge was Japanese. Although Takashima House will not withdraw from the Chinese market at present, foreign retailers such as Ratian Matt, Marthas Department Store and Easy to Buy have all withdrawn from the Chinese market before, which reflects from one side that the competition in retail industry is not only very fierce, but also full of changes and uncertainties. If the project itself lacks core competitiveness and fails to keep up with the rapid changes in the market in the subsequent operation process, it may be eliminated directly. Zhu Zhaorong emphasized to the reporter of China Times that the development and change speed of Chinas commercial real estate in recent years is faster than in the past two decades, and the pace of development will be accelerated in the next five to ten years. Any player in a commercial real estate landscape needs to change his mind. Source: Guo Chenqi_NBJ9931, Responsible Editor of China Times
It is worth mentioning that Zhou Changqing also pointed out that the localized operation and management of Takashima House in China is not in place. During his stay in China, Shanghai Takashima House made personnel adjustments, but the first person in charge was Japanese.
Although Takashima House will not withdraw from the Chinese market at present, foreign retailers such as Ratian Matt, Marthas Department Store and Easy to Buy have all withdrawn from the Chinese market before, which reflects from one side that the competition in retail industry is not only very fierce, but also full of changes and uncertainties.
If the project itself lacks core competitiveness and fails to keep up with the rapid changes in the market in the subsequent operation process, it may be eliminated directly. Zhu Zhaorong emphasized to the reporter of China Times that the development and change speed of Chinas commercial real estate in recent years is faster than in the past two decades, and the pace of development will be accelerated in the next five to ten years. Any player in a commercial real estate landscape needs to change his mind.