On June 30th at 6 p.m., the long-standing department store Meilongzhen Isetan in the core area of Shanghai, and the Japanese-funded Isetan store in Shanghai officially closed its doors. With this closure, Isetan now only has one remaining store in mainland China.
According to Caixin Net’s report on June 30th, in a letter to its partners on March 25th, Meilongzhen Isetan stated that the operation of Meilongzhen Isetan would cease on June 30th as the agreed cooperation period in the Sino-foreign cooperative operation contract signed among shareholders, the lease period specified in the lease contract signed with the property owner of the shopping mall, and the operating period were all coming to an end.
Prior to the closure of Meilongzhen Isetan, Isetan had gradually closed several stores in China, including two stores in Chengdu in 2022, and stores in Shenyang and Jinan in 2013 and 2007 respectively. Following the closure of Shanghai Meilongzhen Isetan, Isetan will only have one store left in China, which is in Renheng Isetan in Tianjin. The Isetan stores in Nanjing Road, Tianjin, and Binhai New Area, Tianjin closed on April 14th and April 27th respectively this year.
Shanghai Meilongzhen Isetan is under the ownership of the Japanese Mitsukoshi Isetan Group and was opened on June 11, 1997.
The closure of Meilongzhen Isetan has once again sparked discussions on social media about “foreign department stores leaving China.” Caixin Net pointed out that in reality, the decline of department store formats has been a common topic and fact in the Chinese commercial real estate sector for nearly a decade.
The China Department Store Association’s “2023-2024 China Department Store Retail Industry Development Report” published in March this year stated that the primary challenges facing the Chinese department store industry are insufficient consumer spending and weak growth, followed by the continuous impact of e-commerce. Additionally, high operating costs, low profits, decreased foot traffic, and difficulties in attracting customers are also challenges currently faced by the industry.
Employees from the high-end beauty and skincare brands at Meilongzhen Isetan revealed to Caixin Net that they have noticeably felt that “people are reluctant to spend” after the epidemic, and there has been a significant decrease in the consumption of high-end beauty and skincare products used as gifts.