TOKYO -- Japanese department store chain Takashimaya will close its flagship store in Shanghai in August and halt its operations in China, Nikkei has learned.
The store has been losing money and the Osaka-based company decided it would be difficult to turn the business around as private consumption has slowed in China amid the trade war with the U.S.
The retailer will hold talks with local authorities on the store's closure. The focus of Takashimaya's overseas operations will shift to Southeast Asia, a region the company sees as more promising.
The Shanghai store, which opened in 2012, has a floor space of 40,000 sq. meters, about the size of a big outlet in Japan. It caters mostly to wealthy residents of Shanghai, offering a range of luxury brand items.
The Shanghai store got off to a bumpy start the year after violent anti-Japanese demonstrations swept China in 2011. The store's opening also coincided with the takeoff of online shopping, further denting business.
For the year to February, the Shanghai store reported sales of 3.2 billion yen, up 0.7%, and an operating loss of 900 million yen, its seventh straight year of red ink.
Despite the stumble in China, Takashimaya will continue its overseas push.
The company has three other outlets abroad -- in Ho Chi Minh City, Bangkok and Singapore. The Ho Chi Minh City store, which opened in 2016, will be expanded to carry more items for families.
Takashimaya is also considering opening another outlet in Vietnam. The store in Singapore is doing well, generating some 20% of the company's operating profit. The Bangkok outlet opened in the fall of 2018.
The company's goal is to turn shoppers into repeat customers at the three Southeast Asia locations.