Nokia shuts its largest flagship store in Shanghai

More bad news for Nokia admirers. The struggling mobile phone giant has shut its largest flagship store in Shanghai in a cost-cutting measure. Instead, the Finnish company will now sell its feature and smartphones through carriers and multi-brand retailers instead.

The closing of its biggest store in the world means that Helsinki is the only remaining city with a Nokia flagship outlet.

“Nokia is focusing on growing its presence in operator and third-party retail outlets, rather than through our own physical stores. We are, of course, also continuously beefing up our online presence. With this in mind, our store in Shanghai was closed on 31 March,” Nokia spokesperson Brett Young told ZDNet.

Nokia’s flagship store in Shanghai has shut down (Image credit: Xinhua)

News of the closure first came to light when Chinese news agencies started reporting that Nokia had posted a sign on the front door asking customers to go to a Nokia Experience store nearby. The sign said that the flagship store on Shanghai’s Nanjing Lu street had shut due to internal restructuring.

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The store opened in 2007 and since then, Nokia has been going through market turmoil and internal restructuring. The former market leader then entered a software licensing deal with Microsoft for Windows Phone and when on to produce what are now the popular Lumia handsets. Two years after the store’s opening, Nokia exited the retail space in Europe and the US and in 2012, the same fate befell Nokia’s stores in Russia.

The closure of the Shanghai flagship store is a culmination of declining sales for Nokia in the Greater China region despite Windows Phone adoption increasing by 1.4 percent in the urban areas of the world’s most populous country. It would seem falling Symbian sales have hurt Nokia more than sales of Windows Phone devices. Revenue from net sales in China decreased from $1bn in Q4 2011 to $213m in the same period last year.

However, there is no denying that China remains a key market for the Finnish company: Last year’s deal with China Mobile to carry a version of the flagship Windows Phone 8 Lumia 920T handset was seen as a major clincher for Nokia. And Nokia continues to target its Asha feature phones at the country’s less well-heeled. That is a key selling region for Asha phones along with India. Beijing is also one of the key development hubs for Nokia, from where the company is launching Asia-specific services.

In an effort to inject more cash into its business, Nokia also sold and then promptly leased back its company HQ in Espoo, Finland. Let’s hope the selling spree ends with the closure of the Shanghai store.