Isetan Mitsukoshi Holdings Ltd. has announced that, because of a continuous decline in performance, the company will close its Shanghai Huating store in November 2008.
This is the second Isetan store that has been closed in China – Isetan closed its store in Jinan in September 2007.
Isetan's first store in China, the Shanghai Huating store was opened in June 1993. The store attained a stable growth after it was opened and its revenue reached about JPY3.6 billion over its best period. However, as Shanghai's economy developed rapidly, the number of flourishing areas and high-end stores is continually increasing. Because of the intense competition, Isetan's Shanghai Huating store made losses in 2006 and 2007, and its operations have been suspended since September 2007.
At the same time, Isetan's plans to enter the Beijing market are also postponed. The company signed a contract with Xidan Maxon International Plaza to open a department store in Beijing in April 2007. However, the developer of Xidan Maxon International Plaza said that the construction of the department store had stopped for almost a year owning to demolition compensation problems and the store may not be able to open within one or two years.
At present, the Japanese brand has five department stores in mainland China.