TOKYO -- Japanese retailer Laox will start a buffet-style restaurant as well as a table-reservation website targeting tourists visiting Japan, as it seeks to branch out from its slumping duty-free business.
The company plans to open a restaurant by this summer in Chiba Port Square, a shopping mall near Tokyo it acquired last year with Chinese real estate group Greenland Holdings. The eatery will feature the buffet-style dining popular among Asian tourists and offer cuisines ranging from Japanese and Chinese to Western. Laox also hopes to attract nearby residents. A newly established Tokyo subsidiary will oversee the new business.
Within the year, Laox will also roll out a Chinese website to reserve tables and purchase meal plans at roughly 200 Tokyo-area partner restaurants, where a number of seats will be set aside for users. Laox hopes to make use of its brand recognition among Chinese tourists to increase the number of restaurants as well and the languages available on the site.
The retailer recorded its first annual loss in three years in 2016 as tourist shopping sputtered. With its mainstay duty-free business sensitive to changes in economic conditions and exchange rates, Laox plans to move into new fields, centering on food. It aims to raise sales outside of existing retail operations to 10 billion yen ($91.7 million) within a year or two.
Originally a seller of home appliances, Laox became a tax-free shop operator after China's Suning Commerce Group acquired a stake in 2009. The Chinese retailer later became its parent company. Laox reported its highest-ever net profit of 8 billion yen for 2015, while riding the tailwind of so-called "explosive buying" by Chinese tourists. But it swung to a 1.5 billion yen loss in 2016, as sales plummeted 30% from the previous year.
While the number of visitors to Japan climbed 20% in 2016, their spending on shopping shrank 2% -- a far cry from the twofold growth seen in 2015. Meanwhile, money spent on food and drink continued to rise, jumping 18% to 757.4 billion yen last year.
"Demand from inbound tourists is recovering rapidly," according to Hiroyuki Miyajima, president of Japanese electronics chain Bic Camera. But Laox President Luo Yiwen warns that "goods sales are volatile and easily influenced by trends."
(Nikkei)
