TOKYO: Takashimaya’s Board of Directors has decided to liquidate China-based subsidiary Shanghai Takashimaya pending shareholder approval, the liquidation would cause a loss of 2-3 billion Yen..
The decision was taken at a board meeting held on June 25, 2019, following the subsidiary’s failure to negotiate a rent reduction. Shanghai Takashimaya’s shareholders will vote on the move at the General Meeting of Shareholders scheduled for August 25, 2019.
Shanghai Takashima Co., Ltd., is a consolidated subsidiary of Takashimaya that operates the eponymous department store located in Shanghai’s Changning District. Since it first opened, the store has sought to deliver an authentic Japanese-style department store experience, and has developed a large local following.
Despite sales growth, the store has failed to turn a profit as initially planned. The lack of profitability is largely due to tough competition within the industry coupled with delays and changes in development projects for adjacent commercial facilities. These problems have been compounded by China’s economic slowdown and falling consumer spending, which reflect the protracted US-China trade friction.
In view of these developments, the Board of Directors concluded that it was no longer feasible for Shanghai Takashimaya to continue, and resolved a plan to dissolve and liquidate the subsidiary. Under this plan, the store will close on August 25, 2019.