The Italian fashion label earlier this year demanded the Shanghai Jiading People’s Court freeze more than 11 million renminbi, or $1.63 million, in assets from the online luxury retailer because of a contract dispute. The request was granted on July 5, and the Secoo-related assets have been frozen immediately for a year.
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Prada began to sell directly on Secoo, alongside Miu Miu, in June 2019, as the Italian brand began to get serious about both digital and China.
During its prime time, Secoo offered more than 400,000 stockkeeping units from more than 3,800 global and domestic brands, such as Prada, Miu Miu, Stella McCartney, Ralph Lauren, Roger Vivier, Versace, Tod’s, Armani and Michael Kors.
While Prada has evolved with China’s fast-changing retail landscape, turning out memorable digital campaigns and hosting multiple events, such as taking over a wet market and staging the spring 2022 show in Milan and Shanghai simultaneously, to engage with the local community, Secoo has struggled to keep up with fierce competition from e-commerce giants like JD.com, Tmall and Doyin.
The company logged a net loss of 566 million renminbi, or $83.8 million last year, a 547 percent increase on 2020. Revenue last year was 3.13 billion renminbi, or $434 million, around half of what Secoo made in 2020. As a result, Secoo has seen its share price fall from its highest point in 2018 at $14.46 per share to 27 cents per share today.
At the same time, Secoo has become the target of multiple legal disputes over sales and loan issues with the likes of Shanghai Longemont Department Store and Shenyang Commercial City Department Store, according to Tianyancha, China’s leading company data search platform.
On Black Cat, a Chinese online user complaint platform, Secoo received more 1,000 customer complaints in the past 30 days. Many accused Secoo of not shipping purchased items with excuses.
The company said at the beginning of 2021 that its board of directors has received a preliminary nonbinding proposal letter from Richard Li, founder, chairman of the board, and chief executive officer of the company, proposing to privatize the company and delist from the Nasdaq.
But in May, Secoo withdrew the proposal, citing “consideration to recent market conditions.” The company’s listing;elm:context_link;itc:0″ class=”link “>company’s listing was later transferred from the Nasdaq Global Market to the less exclusive Nasdaq Capital Market on June 16.
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