TOKYO -- Nitori Holdings, the Japanese furniture and home accessory retailer, will expedite store openings in China in an effort to kick-start its global expansion, company sources said.
Starting in the 12 months through February 2018, the company plans to open more than eight new outlets in China -- compared with the current pace of two to five -- as it accelerates a plan to increase its stores to 2,000 overseas and 1,000 in Japan by 2032. The company now has 41 stores abroad and 420 at home.
China is the main focus of the international expansion strategy, with plans for 1,000 to 1,500 outlets. Nitori intends to initially concentrate new openings in the cities of Wuhan and Shanghai, to quickly boost its brand profile and establish a dominance in the respective regional markets. The retailer wants its Chinese business to turn profitable as early as possible.
Nitori is also exploring other options in China, including online retailing and package offerings of furniture for detached homes and condominiums.
The company opened its first overseas outlet in Taiwan in 2007 and now has 26 stores there, as well as 10 in China and five in the U.S. Monthly sales in China, where its first store was opened in Wuhan in 2014, have continued to exceed year-earlier levels by about 20% for past several months.
The Chinese outlets sell products at prices similar to those in Japanese stores, as the company does not add tariffs to price tags and economizes on logistics. The stores are gaining in popularity through word of mouth, according to the company sources.
Nitori's Taiwanese operation achieved profitability in 2012, the sixth year after the first outlet there was opened.
By contrast, Nitori's U.S. business, which operates Aki-Home outlets, remains in the red as it faces an uphill battle against local competitors including Wal-Mart Stores and Target. The company is exploring ways to differentiate its U.S. stores, such as increasing the percentage of furniture items on display. The company also faces the need to consider closing unprofitable outlets and potentially making acquisitions, the sources said.
In Japan, a new outlet in Tokyo's Takashimaya Times Square commercial complex in Shinjuku is targeting foreign visitors, serving as a "starting point of our brand recognition" among overseas customers, according to Nitori Holdings Senior Managing Director Fumihiro Sudo.
After Nitori opened an outlet in Tokyo's upscale Ginza shopping district, representatives from Chinese real estate developers visited the company to propose their plans to open new stores in China. The representatives also took a tour of Tokyo outlets, according to the company sources.