Japan's largest furniture and home furnishing corporation, 'Nitori', confirmed on the 13th that its 3rd and 6th domestic stores have closed. This comes just two months after the closure of its first domestic store at the Emart Hawolkok branch in April. The closure of such a symbolic first store less than two years after entering the Korean market, followed by the shutdown of another domestic store just months later, is considered unusual by industry experts. Some voices suggest that Nitori may even be contemplating withdrawing from the domestic market.
According to industry sources, a partition has been installed where the Nitori store was located in the basement of Homeplus Gaya in Gangseo-gu, Seoul. The partition bore the words 'Nitori store closed' along with a note indicating preparations for a new store opening. All Nitori products that were displayed are now gone. A Homeplus employee, Mr. Kim (47), said, 'It operated until May 31, and has been like this since then. I heard it was Japan's top furniture company, but there weren't many customers except when it first opened.'
It has also been confirmed that Nitori's 6th domestic store, which opened at Homeplus Geumcheon, has closed during the same period. A Homeplus employee, Mr. Choi (50), said, 'It operated until May and then closed.'
Nitori is a low to mid-range furniture brand from Japan. It started as a furniture specialty store in 1967 and expanded its product range to include everyday goods and miscellaneous items. In Korea, it sells over 8,000 items, including mattresses, sofas, and storage cabinets, as well as living and interior products. Particularly, it has adopted the SPA (Specialty Product Archive) method, which integrates planning, manufacturing, logistics, and sales, to offer reasonable prices and a wide product range, earning it the nickname 'the Japanese IKEA.'
Nitori officially entered the Korean market by opening its first offline store at Emart Hawolkok in November 2023. After that, Nitori aggressively expanded by opening five more stores by August of last year. Previously, in February of last year, Masanori Takeda, chairman of Nitori Korea, noted, 'Nitori plans to expand its overseas stores to over 2,000 by 2032, with Seoul being considered an important base,' revealing a goal to establish 200 stores in Korea within 10 years.
At that time, Nitori operated all six stores as 'shop-in-shop' locations within large retailers like Emart and Homeplus. This was a strategy aimed at enhancing consumer accessibility and convenience by opening within major hypermarkets in the metropolitan area, rather than establishing standalone warehouse stores like the globally recognized furniture giant, IKEA.
Currently, Nitori is not revealing sales trends for its domestic stores. A Nitori Korea representative stated in a call with ChosunBiz, 'It is correct that the Nitori stores at Emart Hawolkok and Homeplus Gaya and Geumcheon have closed,' but added, 'We have no official comment to disclose regarding the reasons for the closures.'
Industry insiders view the closure of the 3rd and 6th stores just three months after the shutdown of the first store as being influenced by the 'corporate restructuring' of the Homeplus locations where Nitori was situated. So far, four out of the seven large supermarkets that Nitori has entered were Homeplus. Given that the Gaya and Geumcheon locations have now closed, they believe it is possible that Nitori was adversely affected by the recent Homeplus situation.
An industry insider commented, 'The restructuring of Homeplus is a cumulative result of worsening performance, which means there haven't been many consumers visiting or purchasing from Homeplus. It appears that even fewer people sought out Nitori stores, indicating a chain reaction might have occurred.'
Professor Jong-Woo Lee from Inha University stated, 'As furniture and kitchen products can easily be purchased online, the consumer pattern of visiting large hypermarkets has changed, resulting in lower sales. Given this situation, as Homeplus initiated corporate restructuring procedures, Nitori may be responding in advance to recover some of its investment costs due to uncertainty about the future.'
A Homeplus representative said, 'The closure of Nitori stores is a matter that was already agreed upon before our corporate restructuring and is not directly related to that,' explaining, 'It was decided to end operations at the end of May due to a change in Nitori's expansion strategy.'
Some view this not only as a separate issue of poor conditions in the domestic furniture and interior market but also as potential setbacks in Nitori's strategy in the Korean market. In the worst case, it could lead to a withdrawal from the Korean market.
Another industry insider mentioned, 'Although Nitori pursued an accessibility strategy through large hypermarkets, its delivery and logistics systems were often disconnected from Korean society. A notable example is the delivery taking one month to six weeks,' adding, 'While improving accessibility through large hypermarkets was beneficial, it did not translate into actual purchases.'
Professor Eun-Hee Lee from Inha University expressed, 'It appears Nitori decided to reduce its number of stores when it couldn't find a clear solution after evaluating sales and operating profits internally, signaling a negative outlook for success in the Korean market.'