Japan Home Centre aims to diversify products after planned IPO
The former knick-knacks chain now specialising in housewares hopes to move into products for men after its planned initial public offering
Facing a slowdown in retail growth in the city, the operator of Japan Home Centre - a chain that sells affordable household goods - aims to increase its revenues by diversifying its product mix and expanding further abroad.
"Our customers are middle-class housewives," Peter Lau Pak-fai, chairman and co-founder of International Housewares Retail, told a news conference to announce details of a planned HK$607 million initial public offering.
Mainlanders [prefer] imported and Hong Kong brands
But Lau said the firm would try to broaden its customer base by expanding into men's personal and health care and more upscale products.
Despite its name, Japan Home Centre has no relation to that country. A Hong Kong firm, International Housewares was launched in 1991 and operated for some time as a chain of "HK$10" one-price shops before specialising in housewares.
It now has 303 shops and is the biggest player in Hong Kong, with 235 shops and a market share of 39 per cent. It has five shops in Macau and 38 in Singapore as well as licensed stores in East Malaysia, Saudi Arabia, New Zealand and Indonesia.
Much of the firm's success has hinged on a lack of direct competitors. Its main rivals are supermarkets, where the core focus is not on housewares, or small family owned shops with a limited product range.
Japan Home offers more than 20,000 distinct products and enjoys high margins on its custom-made goods. Gross profit margin on these lines has been at about 55 per cent for the past three years.
