Japanese eyewear retailer Aigan to exit China
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The company said that Japanese eyeglasses seller Aigan will leave the Chinese market as the impact of the coronavirus dims its hopes for turning a profit.
Already weak earnings in China have been squeezed further by coronavirus-related disruptions that forced temporary store closures.
The Osaka-based company’s Chinese arm has lost money for seven straight years since 2015.
Aigan set up a China unit in 1994 and later expanded to six stores in Beijing and Tianjin, including franchisees.
Also, on Monday, the company projected a group net loss of 425 million yen ($3 million) for the fiscal year ending March 2023 — wider than the previously forecast 315 million yen. It cited losses related to liquidating the Chinese unit, estimating them at 110 million yen.
Questions & Answers
Q.What prompted Aigan's decision to leave the Chinese market?
What prompted Aigan's decision to leave the Chinese market?
Aigan decided to exit China because the ongoing impact of coronavirus dimmed its prospects for profitability. The company had already faced weak earnings, which were further exacerbated by coronavirus-related disruptions and forced store closures.
Q.How long had Aigan's Chinese operations been unprofitable before the decision to exit?
How long had Aigan's Chinese operations been unprofitable before the decision to exit?
Aigan's Chinese arm had been consistently losing money for seven consecutive years, starting in 2015. This long period of unprofitability contributed to the company's decision to leave the market.
Q.What is Aigan's projected group net loss for the fiscal year ending March 2023?
What is Aigan's projected group net loss for the fiscal year ending March 2023?
Aigan projects a group net loss of 425 million yen for the fiscal year ending March 2023. This is a wider loss than its previous forecast of 315 million yen, partly due to costs associated with liquidating the Chinese unit.
Q.When did Aigan first establish its presence in the Chinese market?
When did Aigan first establish its presence in the Chinese market?
Aigan initially set up its Chinese unit in 1994. Over time, it expanded its operations to six stores across Beijing and Tianjin, which included some franchised locations.