Watsons China closed 669 stores in 4 years — HK$378M EBIT loss, per-store revenue down 39%

Watsons (屈臣氏) was founded in Hong Kong in 1841 and acquired by Li Ka-shing in 1981, growing into Asia's dominant health-and-beauty drugstore chain. Its mainland China business peaked at 4,134 stores in 2021 — more than any foreign retailer — built on convenient locations in shopping malls and city centers across the country.

The decline came faster than the store network could adjust. By 2025, store count had fallen to 3,465 — 669 net closures in four years. Revenue declined from HK$17.58 billion (2022) to HK$13.27 billion (2025), a 25% drop. EBIT swung to a HK$378 million loss in 2025. Revenue per store fell 39%, from HK$6.23 million (2019) to HK$3.83 million (2025).

The causes were structural. Online beauty sales overtook offline in China in 2023, with livestream e-commerce and domestic beauty retailers pulling younger shoppers away from physical drugstores. Watsons' store network had been designed for an era when convenience meant physical proximity — but shoppers no longer needed to walk past a Watsons to buy shampoo. The company's O+O (online-plus-offline) strategy tried to close the gap, but thousands of leased stores created a fixed-cost base that could not shrink fast enough.

Watsons plans a dual listing in Hong Kong and the UK in 2026, aiming to raise approximately US$2 billion, but its China division — once the growth story — is now the weakest link. The chain still operates 3,465 stores across China, but each one generates less revenue than before, and the trajectory shows no sign of reversing.