Nokia’s retail store retreat continued this week with another big store closure. The struggling handset maker shuttered its flagship store in Shanghai, China, at the end of March as part of an effort to refocus its sales strategy.
“For a while now, Nokia has been focusing on growing its presence in operator and third-party retail outlets, rather than through our own physical stores,” a Nokia spokesman told AllThingsD. “We are, of course, also continuously beefing up our online presence. With this in mind, our store in Shanghai was closed on March 31.”
The shuttering of the Shanghai store — Nokia’s largest — follows a massive retail withdrawal that has seen a number of closures around the world, including the felling of the company’s Finnish-forest-themed flagship store on London’s Regent Street. Where once it had a dozen stores around the globe, Nokia now has just one — its recently remodeled outlet in Helsinki, Finland.
The closure of Nokia’s Shanghai store — which, when it was opened, was the seventh of 18 planned flagship outlets — is one more indicator of the global malaise from which the company suffers. China is a market crucial to Nokia’s successful turnaround; closing up shop in Shanghai is a tacit admission that the store never attracted the sort of foot traffic for which Nokia had hoped. Certainly, it didn’t do much to sustain Nokia’s business in China. The company saw revenue from Greater China plummet a gruesome 79 percent in the fourth quarter.
Reducing operating costs AND leveraging an established distribution outlets in China AND leveraging an internet prescence - please explain the logic to this hit piece, it totally escape me, and it totally escapes me why someone would want to be associated with posting something that has no substance. Did you even read what you rush to post? Do you even have a clue that companies routinely look to increase profitable revenue, decrease operational costs and improve operational efficiencies? The more appropriate question to the Nokia CEO would be exactly why havent you accelerated the closure of all Nokia retail outlets, I can understand maintaing a flagship store in the home country, but outside the boarders of Finland, why waste money on those, marketing in the 21st is a different ballgame these days.
Why would I want my own Outlets when I have China Mobile outlets everywhere. It just goes to show you the close ties they have forge with each other. With Microsoft who's doing a great deal of advertising for Nokia, I say Nokia is getting a free ride on all fronts. Yea I would have done the same thing! They can just focus on their online marketing.
Interesting way to put a negative spin on a smart move. The company is less interested in selling direct, which doesn't work so well without cell service; so it is focusing on selling through actual cell phone companies.
It sounds like they are eliminating wasteful spending and are deploying resources where they make sense, as in strategic sales channels.
This is very positive.
Sentiment: Strong Buy