The encyclopedia · Strategy & Leadership · Strategic decision · 2025
NITORI closed a fifth of its China stores after an overambitious expansion
Japan's largest home-furnishing retailer closed a fifth of its China stores in 2025 after an overambitious expansion plan hit a slowing market
NITORI · 2025-06
What happened
NITORI, Japan's largest home-furnishing chain, entered China in 2014 and grew to 105 stores by the end of 2024. Founder Shino Akio announced plans in early 2024 to open 150 stores per year in China, targeting 900 stores by 2032. The company doubled its China store count in just over a year, from 67 stores in August 2023 to 105 by late 2024.
The ambition reversed abruptly in 2025. Between March and June, NITORI closed 21 stores across Beijing, Tianjin, Ningbo, and Fuzhou — a fifth of its China footprint — reducing its mainland count to 84. The contraction came as NITORI's global revenue declined and operating profit fell for the fifth consecutive year, leaving no room for the capital-intensive expansion its founder had promised.
Why it happened
- Founder Shino Akio set unrealistic expansion targets — 150 new stores per year, 900 by 2032 — without the market demand or financial cushion to support them.
- China's home-furnishing market slowed as the property downturn reduced consumer spending on furniture; IKEA China's revenue also fell 7.6% in FY2024.
- NITORI's global operating profit declined for five consecutive years, constraining the investment needed for rapid China expansion.
- The rapid buildout (67 stores in Aug 2023 to 105 by late 2024, +57% in 15 months) opened underperforming locations that were the first to close.
The lesson
Aggressive expansion plans mean nothing without the market conditions and financial reserves to withstand the buildout phase.
Sources
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