On 6 May, it was reported that there was finally an update on the long-speculated sale of the luxury department store, SKP Beijing. Just before the May Day holiday, the Beijing Municipal Administration for Market Regulation (MAMR) released a Notice on Boyu Capital’s acquisition of stakes from Beijing SKP.
The Notice details that Boyu, a private equity firm headquartered in Hong Kong, will indirectly acquire between 42% and 45% of the stake in Beijing SKP through financial investment. However, the exact amount of investment was not disclosed. Since late March, rumours have been circulating about the sale of the department store. Bloomberg went as far as claiming the acquisition had already taken place, with the price being between 4 and 5 billion USD.
The shopping centre is probably best known for overtaking Harrods in 2020 to become the world’s number 1 department store in terms of sales, with 17.7 billion RMB (2.43 billion USD) in revenue that year. The Bloomberg report notes that the SKP department stores in Beijing, Xi’an and Chengdu had earned 26.5 billion RMB, 8 billion RMB and 5.5 billion RMB in sales, respectively, in 2023. Meanwhile, the Beijing MAMR Notice also pointed out that the Beijing, Xi’an, Chengdu and Wuhan SKP malls increased from 10% to 15%, 15% to 20%, 10% to 15% and 0% to 5% of the market share in the retail sector in their respective cities in 2024.
Since SKP is not a listed company, there are no official financial results, but third-party data shows that in 2024, its sales dropped 17% to 2.2 billion RMB (278 million USD), after being the top high-end shopping centre in China for 6 years. As luxury saw headwind in recent years, many shopping centres like Swire’s Taikoo series of malls began opening larger flagship stores for luxury brands to enhance the experiential side of shopping. But for SKP, which is a department store, it was not possible.
The lack of an official e-commerce channel or partner is also a weakness for SKP, compared to its global competitors like Harrods and Selfridges. With its strength in having a large variety of brands, a comprehensive e-commerce platform might help SKP get back on track. However, as pundits note, with Boyu’s share at 45% maximum, changes might not come as fast as many had hoped.
Need to boost your China strategy? Dao Pro delivers bespoke insights on marketing, innovation, and digital trends, direct from Chinese sources. Find out more from our Dao Strategy Team here.
