Photo/Shetuwang

June 27 (NBD) -- Long-established Japanese department store Takashimaya Tuesday announced that it will close its Shanghai store on August 25.

The store in Shanghai has been losing money and the Osaka-based company found it difficult to turn the business around due to unpredicted changes of consumption structure and increasingly intensified competition. 

Located in the city's Changning District, the store, the first and only Takashimaya outlet in China, had sought to deliver an authentic Japanese-style department store experience since its opening in December 2012. 

"The store offers a complete range of Japanese products and often holds interesting displays," a Shanghai native told National Business Daily (NBD). "Since it is not in the downtown area, I didn't visit often. Every time I visited there, I found there weren't many customers." 

Few customer flow, without doubt, means a tepid performance. Takashimaya claimed the Shanghai store hasn't yet turned profitable despite growth in sales revenue. Data from the company shows that the store in the Chinese metropolis reported operating profits of -59.76 million yuan (-8.7 million U.S. dollars) in fiscal 2017, -68.6 million yuan in fiscal 2018, and -52.07 million yuan in fiscal 2019. 

To turn losses into gains, Takashimaya has made many attempts, including introducing more well-received brands and opening more restaurants and coffee shops, but all these efforts didn't turn the table. 

Tao Wensheng, an expert in retail and partner of management consultancy Allpku, said to NBD that the rapid development of China's mobile internet prompted the rise of e-commerce and new retail, bringing enormous changes to the retail market. 

Many foreign department stores failed to adapt to the new marketing model and cater to the consumption habits of new-generation consumers in the process. For them, more work should be done to enhance the understanding of the spending habits of Chinese consumers and transform operation philosophies, Tao said.  

Email: lansuying@nbd.com.cn