Dalian Wanda shutters stores
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China’s Superstar days are over.
Hong Kong listed retail group Dalian Wanda is to close down China’s largest karaoke chain Superstar, a victim of the mainland government’s mission to discourage excessive spending on entertainment and gifts.
The company has also flagged the closure of an unspecified number of its department stores due to tough competition from online retailers, eating into store sales volumes.
Some Chinese news media are reporting as many as half of the company’s 90 department stores could be shuttered, but the company remains vague.
“China’s consumer behaviour is undergoing significant changes, inevitably hurting some large-scale retailers,” said Qu Dejun, president of Dalian Wanda subsidiary Dalian Wanda Commercial Properties.
Before the Chinese government’s clampdown on entertainment expenses, karaoke parlours were popular destinations for government officials and businessmen entertaining clients and contacts.
Qu said Superstar would close because the chain’s profits were now very thin due to “national policy”.
Taiwan karaoke chain Cashbox Partyworld has already trimmed back its mainland karaoke network.
Questions & Answers
Q.What is the primary reason Dalian Wanda is closing its Superstar karaoke chain?
What is the primary reason Dalian Wanda is closing its Superstar karaoke chain?
The Superstar karaoke chain is closing due to the Chinese government's mission to discourage excessive spending on entertainment and gifts, which has led to very thin profits for the chain according to Dalian Wanda's president.
Q.Why are Dalian Wanda's department stores facing closures?
Why are Dalian Wanda's department stores facing closures?
The department stores are facing closures due to tough competition from online retailers. This competition is eating into their store sales volumes, forcing Dalian Wanda to consider shuttering an unspecified number of these locations.
Q.How many department stores might Dalian Wanda close, according to some reports?
How many department stores might Dalian Wanda close, according to some reports?
Some Chinese news media are reporting that as many as half of the company’s 90 department stores could be shuttered. However, the company itself has remained vague about the exact number of closures planned.
Q.What factor previously made karaoke parlours popular in China?
What factor previously made karaoke parlours popular in China?
Before the Chinese government's clampdown on entertainment expenses, karaoke parlours were popular destinations. Government officials and businessmen frequently used them for entertaining clients and other important contacts.
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