Chinese top online luxury retailer Secoo files for bankruptcy
Secoo, once China’s top online luxury goods retailer, has filed a bankruptcy petition for the second time this year after failing to get through financial difficulties amid weak domestic consumption for luxury goods.
According to Chinese business data and investigation platform Tianyancha, Beijing Siku Shangmao Co, the corporate entity of Secoo, has filed for bankruptcy with the First Intermediate People’s Court of Beijing Municipality.
The Nasdaq-listed company has withdrawn a bankruptcy petition in January after several Chinese media reported that Secoo was unable to pay off its debts.
Last week, Secoo lost a legal dispute with Prada, where the luxury brand demanded Shanghai Jiading District People’s Court freeze more than US$1.6 million of Secoo’s assets for a period of one year. Prada is not the only company that Secoo has contractual disputes with.
Secoo saw its revenue and profit drop significantly last year, it booked a 48 percent year-on-year decrease in revenue last year, while recorded a net loss of $88.8 million.
Founded in 2008, Secoo started off a second-hand handbag shop and soon became one of China’s leading online luxury goods retailers, operating branches across Beijing, Shanghai, Chengdu, Qingdao, Tianjin, Xiamen, Hong Kong and Malaysia. At its prime, Secoo operated more than 400,000 products from 3,800 global and domestic brands on its shopping platforms including its website, app and brick-and-mortar stores.
It also forged a strategic partnership with online consumer loans provider Qudian to cooperate in supply chain management, user acquisition and retention, quality appraisals, post-sales services, and financing solutions.
The company made its Nasdaq debut in 2017, raising about US$140 million. Secoo begun receiving a delisting warning from Nasdaq last year after the company’s share price dropped below $1 for 30 consecutive business days. Its share now traded at US$0.28, which is a huge discount compare to a high of US$14.6 in 2018.