Embattled Luxury E-Commerce Platform Secoo Denies Desertion Reports
Beijing Business News reported on August 17 that the headquarters of Secoo, a luxury e-commerce platform based in the center of Beijing’s business district and once filled with luxury goods, is now empty. Also, some security staff members said that people began moving goods out six months ago, and that floors one through four are now empty, leaving only the fifth floor occupied with employees. In addition, Secoo’s logistics warehouse center, YH Global in Beijing Economic-Technological Development Area, has also been vacated.
Regarding the concerns, Secoo affirmed today to domestic media that such reports were not true. The company said: “Our office only occupies one floor of the building, which is the fifth floor. At present, the office area has not been reduced, and several hundred people are working normally. Media reports say that the first floor has been emptied. In fact, this used to be the company’s luxury goods exhibition area and warehouse. At present, we have moved all luxury goods to a professional warehouse for storage and delivery.”
Consumers have been repeatedly denouncing Secoo recently. According to data from Black Cat, a consumer services platform in China, there were more than 17,000 online complaints posted against Secoo, most with keywords such as “no delivery” and “no refund.” However, users can still place orders on the Secoo app normally, and various preferential activities are still available.
Secoo was established in April 2009 with a registered capital of 10 million yuan ($1.48 million). In September 2017, it went public in the US. Secoo focuses on luxury goods, including bags, watches, clothing, jewelry, and other items.
However, its 2021 report showed annual revenue of 3.132 billion yuan, down 48% from 6.02 billion yuan in 2020. Meanwhile, net losses reached 566 million yuan, an increase of six times from 2020. As of August 17, the market value of Secoo was only $17.64 million, having shrunk by nearly 98% compared with $770 million at its peak.
In addition, Secoo filed for bankruptcy twice within one year, and it has been involved in hundreds of sales contract disputes so far in 2021 – in most cases, it was the defendant. On July 27, PRADA Fashion Commerce (Shanghai) Company Limited applied to freeze the property of more than 11 million yuan and corresponding value under Shanghai Secoo E-Commerce Co., Ltd., a wholly-owned subsidiary of Secoo. The application has been implemented, and will last for one year.
In March 2022, Secoo announced it had signed a $175 million refinancing agreement with Great World Lux Pte. However, according to Beijing Business Today, Shen Meng, the chief strategist of Guangke Management Consulting (Guangzhou) Co., said that the refinancing is just meant to restructure existing loans under new conditions, to a certain extent. For Secoo, it can delay the pressure of debt repayment, but it cannot fundamentally reduce the burden of debt. Secoo’s prospects now seem dire, and it is difficult for investors to change their expectations.
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