Japanese firms hit by COVID lockdown in Shanghai
The coronavirus lockdown in Shanghai is forcing Japanese retailers to halt operations in the Chinese commercial and financial hub, while Japanese manufacturers have also been affected including through supply-chain disruptions.
With the city locked down in line with Beijing’s radical zero-COVID policy amid an increase in infections, Ryohin Keikaku Co, the operator of retail brand Muji, had closed about 50 of its over 300 stores in China as of last week.
“We expect (the performance) in the second half of the business year (from March) to fall significantly below our forecast,” President Nobuo Domae said Thursday. The company revised downward its earnings forecast for its business year through August, citing the adverse impact on its business in China.
Clothing retail giant Fast Retailing Co had closed all 86 outlets of its Uniqlo clothing chain and eight stores of its GU casual brand in Shanghai as of Thursday.
Tadashi Yanai, chairman and CEO, told reporters on Thursday that the company has been “troubled significantly in terms of revenue and from the standpoint of employees’ daily lives.”
Convenience store operator Lawson Inc was forced to close 80 to 90 percent of its around 1,000 stores in Shanghai.
Among manufacturers, Sony Group Corp, Mitsubishi Electric Corp and Sharp Corp have suspended operations at factories in the city for extended periods of time.
Operations in Japan have been affected too due to delays in parts procurements from suppliers in Shanghai. Mazda Motor Corp shut down two plants in Japan for a total of eight days this month, while Mitsubishi Motors Corp suspended operations at a major factory in Aichi Prefecture for five days from April 11.
Japan Airlines and All Nippon Airways said some cargo flights on the Shanghai route have been canceled due to the difficulty of securing mechanics or staff who can load and unload their planes.
Japan has been shipping semiconductors to Shanghai while importing electronic components from the Chinese city.
“As long as (China) sticks to its policy of conducting lockdowns, the impact on the (Japanese) economy will become more serious,” said Kengo Sakurada, who leads the Japan Association of Corporate Executives.