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  • Lush calls out Hong Kong landlords after flagship closing

    Lush calls out Hong Kong landlords after flagship closing

    Lush has taken a positive approach to its future in Hong Kong following the closure of its Central flagship store at the end of last month.

    But it has criticized the city’s landlords generally for failing to share the burden of a decimated retail market in the wake of the pandemic. The beauty products company said the decision to close the five-story flagship store, and its first spa in Asia at the end of its lease took “much consideration”.

    Lush said that all of its other stores in Hong Kong and Macau will continue to trade as usual.

    The Soho Square store’s closure reflected the challenges of dealing with reduced footfall during the Covid-19 crisis, the impact of “previous conditions” and a lack of early response from landlords and the government to help struggling businesses.

    “The pandemic has challenged many businesses around the world. Unfortunately, the measures to help in Hong Kong have been very late. Up until the end of January we had received little support from landlords or the government. However, the measure on salaries is very much needed and we are grateful for this.

    “Even though we are saying goodbye to Lush Soho Square Shop & Spa, we want to highlight the achievement of the team in the past five years and thank them for all their hard work. We have loved bringing the spa experience to customers in Hong Kong and we hope they have enjoyed every moment.”

    Elsewhere in Hong Kong, Lush has been engaging with landlords across the two territories because rent accounts for the majority of costs to businesses of all types.

    “We know it is also difficult for our landlords and as property owners, they also have a vested interest in the future of the retail industry,” Lush said in its email. “We would like to thank our partners who have to date been open to constructive discussion and particularly for those that have given discounts of 50 percent and above.

    “But this isn’t the time for one party to take all and one party left with all the burden. We believe there is collective social responsibility, and landlords and retailers should work collaboratively together to ensure retail survives in Hong Kong, which will benefit the local people and economy that in turn supports property owners that need rental tenants.

    “Some landlords gave us a slight discount on rent in February and March, following negotiations with us. However, this is not reflective of the reality we are facing. We have been in continual negotiations of the rent relief and payment plan with the landlords, and we are confident of keeping things under control with our strategic property plans, and where governments have offered pay schemes and guarantees we are making use of these to ensure staff payroll is protected as much as possible whilst there is little money flowing into the business.”

    Meanwhile, over the past few months, the company has worked to have a positive impact on the local communities during the pandemic.

    Underpinning the message of washing hands to keep the virus at bay, Lush donated more than 8 tonnes of soap to healthcare workers, non-profit organizations and minority groups.

    “We strongly believe that this is the time we have to help each other locally to overcome the unpredictable challenges so that we can support a positive future together.

    “We look to the future with optimism and sincere gratitude to our incredible staff and community. We are doing our best to make decisions and operate the only way we know how: honestly and transparently.”

    Lush founder Mark Constantine said the pandemic may bring many long-lasting changes to the way people live their lives.

    “Lush needs to adapt to these changes, stay agile and relevant, whilst holding true to our principles of being a business that is kind and caring. We will need the help of everyone as we enter this next phase.”

  • FamilyMart Japan culls staff as store network shrinks

    FamilyMart Japan culls staff as store network shrinks

    FamilyMart Japan is reducing its operational costs by letting go 800 employees.

    The redundancies equate to about one in 10 of the convenience-store operator’s total staff count, and will be offered with severance packages for volunteers who opt to leave the firm. Moves will also be made to allow the brand’s franchisees to operate shorter opening hours.

    “We got bigger after the repeated consolidations, but we have yet to streamline,” said FamilyMart Japan president Takashi Sawada in a Nikkei report. “Even if there isn’t an agreement with the home office, we will respond in accordance with the intent of what member stores decide.”

    The staff cuts follow a gradual reduction in outlets from 18,000 in 2016 to 16,500 this year.

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  • ‘Unprecedented’ South Korean boycott damaging Japan’s retailers

    ‘Unprecedented’ South Korean boycott damaging Japan’s retailers

    Having now run for more than 100 days, the scale and impact of the South Korean boycott movement against Japanese products is unprecedented.

    It is costing retailers, importers, airlines and travel companies millions of dollars as a largely volunteer group of consumers rally citizens to their cause, popularised by its slogan ‘I Will Not Buy, I Will Not Go, and I Will Not Wear”.

    The South Korean boycott is rooted in discord between the two countries dating back to Japan’s colonial occupation of the Korean Peninsula before and during the Second World War and controversy over forced labor and sexual slavery. It expanded into a diplomatic crisis in July after Japan threatened to throttle exports of materials essential to South Korean industries.

    Prior to July, Japan was South Korea’s largest source of imports by value. Shortly after the boycott began, its ranking fell to third in July and to 13th in August. Last month it fell to 28th.

    Emforce, a South Korean digital marketing firm, has reported that the word ‘boycott’ appeared 1.18 million times on social media networks this year, which was 10 times the size of the previous boycott movement following Japan’s celebration of Takeshima Day in 2013.

    Japanese retailer Uniqlo is a prime example of the impact of the ‘I Will Not Wear’ boycott movement. Uniqlo has closed four Uniqlo stores since July and the number of people visiting stores that remained open has plummeted.

    According to records from eight credit-card companies, Uniqlo sales plunged by 70.1 percent to 1.77 billion won (US$1.49 million) in the fourth week of July from 5.94 billion won ($5 million) in the last week of June.

    However, amid the decrease in brick-and-mortar store sales, there is a sign of consumption picking up at Uniqlo’s online mall, with its popular winter products, heat-retaining underwear called Heattech and light-weight padded jackets selling out.

    Uniqlo is still expected to experience mixed fortunes in Korea this winter, as social media is still awash with messages urging users not to buy Japanese products and support the boycott.

    According to the Emforce analysis, among some 1.28 million posts on Twitter related to the boycott movement between July and August, 93.3 percent were retweets, and 6.7 percent were new posts. While retweets still account for the majority, there were 85,000 new posts about the boycott movement between July and August, which was eight times more than the total number of relevant tweets posted in the entire year of 2013.

    “It shows the scale of the movement and how each participant is taking deep interest in the matter from various standpoints,” said the report.

    “Netizens retweeted posts made not by the media or civil groups, but by other netizens advancing their own opinions and sharing the boycott list of Japanese products.”

    Data Lab, Line parent Naver Corp’s big-data platform, reported a decrease in the number of clicks on Japanese products throughout almost all sectors at online shopping malls.

    “The initial drive that’s been leading the movement is weakening. Nevertheless, it is now being replaced with a collective habit of rejecting Japanese products since more consumers are less inclined to buy due to the bad economy,” Data Lab said.

    “The aftereffects of the movement are expected to continue.”

    While some South Koreans are still purchasing Japanese products, the voluntary participation of the public still leaves little room for Japanese companies, according to Korea Bizwire.

    Japanese beer has all but disappeared from store shelves, with the Korea Customs Service, reporting just $6000 worth of Japanese beer crossed the border in September.

    The South Korean boycott of travel to Japan has also sent shockwaves through the Japanese economy. Passengers on flights bound for Japan dropped 30 percent in September from a year earlier during the Chuseok holiday season, the peak travel season.

    According to the Korea Economic Research Institute, there was a 27.6-per-cent drop in the number of South Korean tourists visiting Japan in July-August which cost the Japanese economy an estimated US$292 million.

    The October reservation rate also dropped and despite a reduction in the number of flights, occupancy was just 60 per cent on those still scheduled.

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  • Hyundai Ioniq Recalled in South Korea over Rolling Backwards Problem

    Hyundai Ioniq Recalled in South Korea over Rolling Backwards Problem

    The South Korean manufacturer launched the Ioniq in its home market two months or so ago, yet Hyundai had to recall the electric drive hatchback after a video was published on YouTube. That particular video can be found at the end of this story. Just skip to the 4-minute, 4-second mark and observe what happens.

    Let’s put into words what occurred there. The driver took the Ioniq on an uphill parking exit. He brings the car to a stop while still on the exit ramp. After that, the driver takes his foot off the brake pedal, expecting the hill start assist system to keep things under control. But it doesn’t. He then pumps the throttle pedal repeatedly, only to find out that the Hyundai Ioniq doesn’t do a hill start.

    After the car had started rolling backwards, a firm press of the brake put an end to this dangerous incident. The South Korean motoring media took notice of the incident and Hyundai paid attention, prompting an internal investigation. And as expected, the company decided to recall all Ioniq vehicles made until March 14 for a software update. The Ioniq Hybrid, Plug-in, and Electric made after March 14 have been given the updated software, so they’re not included in this campaign.

    Slated to debut in the United States of America later this week at the New York Auto Show, the Hyundai Ioniq arrives just in time for the 2017 model year. The Ioniq Hybrid will be the first model to hit dealerships nationwide, followed by the Ioniq Electric and the Ioniq Plug-in variants by the end of the calendar year.

    Pricing information for the U.S. market isn’t available at the time of writing, yet don’t expect Hyundai to sell the Ioniq Hybrid for more money than Toyota is selling the fourth-generation Prius. More specifically, the 2017 Hyundai Ioniq Hybrid could hold a suggested retail price of under $25,000 sans destination.

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