ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintTitle ChevronIcon Twitter
Companies

Japan home accessory chain loses investors as China push falls apart

Nitori shows little progress in plan to open 200 Chinese stores by 2022

A Nitori store in Tokyo's Ginza district. The company has struggled to expand in China, a market it had tapped for growth. 

TOKYO -- Nitori Holdings, Japan's answer to Ikea, dropped to a new multiyear low during trading Wednesday after institutional investors vented frustration toward the lack of progress in a proposed China expansion.

Shares closed 3% down to 12,285 yen, a level not seen since February 2017. Nitori said it would open 200 outlets in China by 2022, but the furniture seller has opened just one new store so far this fiscal year. The number of Chinese outlets is set to remain at 38 by the time the year ends in February 2020.

Nitori has essentially abandoned a rapid expansion in China, and the company will rework its growth strategy.

Group operating profit is on track to notch a 33rd consecutive record year, climbing 3% to 104 billion yen ($942 million). Regardless, "it has become problematic to expect growth in China, and a question mark hangs over sustainable growth," said an analyst at an international brokerage.

Nitori revealed the change in its China strategy in early April when reporting earnings. The stock price has since traced a downward spiral amid persistent market concerns.

A recovery in Nitori's share price is not anticipated to occur soon. The price-earnings ratio of 19 is roughly on par with the average among Japanese retailers, meaning Nitori would not be perceived as a value stock.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends October 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more