Takashimaya admits to losing money in Shanghai, Saigon
Just one of Japanese department store chain Takashimaya’s three overseas stores is currently trading at a profit.
But the company says it believes it can make them all profitable by 2023, including a fourth store set to open in Bangkok late this year.
The successful store is on Singapore’s Orchard Road, which opened in 1993 and is reportedly earning more than 3 billion yen (US$27.2 million) annually.
The chain’s Shanghai store, which opened in 2012, has been hampered by delays in the completion of neighbouring projects which would have drawn higher visitor numbers, along with administration costs running over budget. According to a report published by Nikkei, the store is expected to post its seventh consecutive loss in the 12 months to February next year, but should make money in 2020.
The Ho Chi Minh City store in Vietnam, which opened in 2016, has “struggled from the start” according to Nikkei, its offer apparently too expensive for middle-class Vietnamese consumers. The company plans to boost sales by “broadening offerings of everyday items for families” which it hopes will lead it into profit in the 2022 year.
The planned Siam Takashimaya store will be one of the anchors of Siam Piwat’s IconSiam, currently under construction and scheduled to open late this year – possibly in October.
Takashimaya anticipates the Bangkok store to be profitable in its first year, thanks to rent concessions.
The company’s president, Shigeru Kimoto, said it plans to continue Southeast Asian expansion, despite the challenges to date because it sees potential in the region.
“In the long term, we seek to capitalise on Asia’s growth,” he said.