Takashimaya in China has reversed its decision to shut down its Shanghai store after negotiating a rent reduction.
“Due to support from the landlord and Shanghai Changning District, we can expect improvement in profitability of the business,” read a statement from the firm.
Takashimaya in China has not turned a profit since its launch in 2012 despite its location in close proximity to a large and affluent Japanese community. Takashimaya was anticipating a ¥2–3 billion (US$18.7–28.1 million) loss at the end of this financial year before the reversal.
It is not clear whether or not the firm received assistance from the Chinese government to continue operating, although tax incentives may have been likely. The closure of Takashimaya would have had a significant effect on the local area’s economy given the recent sale of a large interest in nearby rival store Carrefour following years of losses.
An online commentator referenced in a Nikkei report wrote, “The problem with Takashimaya is its location, which is far away from the main road and the poor goods on offer. Probably only ghosts will shop there.”