Used brand goods seller Komehyo to close Beijing unit on low trade-in
TOKYO, NNA – Japanese used brand goods seller Komehyo Co. has decided to close its Beijing unit due to a shortage of trade-in items after the store opening over a year ago.
The company said Tuesday it closed LuxStory, its first overseas store for the sales of brand-name bags, watches and jewelry in Beijing, on Dec. 5. It will liquidate Beijing Huaxia Komehyo Ltd., the local joint venture with a Chinese partner, without disclosing a specific time schedule.
The major Japanese second-hand goods retailer established the 50-50 venture between its subsidiary Komehyo Hong Kong Ltd. and a Beijing-based investment firm in mid-2017, according to a statement.
Despite an increasing number of shoppers and growing awareness of the store, the Beijing unit will cease store operation as it expects to take an overly long time to establish a self-sufficient scheme for sourcing and sales of branded goods in the city, the statement said.
Komehyo will shift management resources to Komehyo Shanghai Ltd., a wholly owned trading unit founded in December 2017 by the Hong Kong subsidiary, to build a firm business model in China, it said.
The Beijing venture posted a net loss of 91 million yen ($838,000) on sales of 59.3 million yen in the year to March 2019, according to the statement.
The listed firm headquartered in Nagoya, central Japan, intends to gear up overseas business mainly in Hong Kong, Thailand, and Taiwan in addition to Shanghai.