August 25, Shanghai Secoo E-Commerce Co., Ltd., an affiliate of luxury e-commerce platform Secoo, has filed for bankruptcy. The claimant was Shanghai Weiqi Trading Co., Ltd. and the competent court was the Shanghai Third Intermediate People’s Court.
The company was established in September 2013 with a registered capital of 120 million yuan ($17.51 million). Its legal representative is Meng Xiangjun and is 100% owned by Beijing Secoo Trading Co., Ltd. It should be mentioned that Beijing Secoo Trading has also been notified of filing for bankruptcy twice.
Since last year, there have been reports that Secoo has failed to pay employee wages, failed to pay vendors for goods, and failed to deliver or refund orders placed by users. The Tianyancha business investigation platform shows that Beijing Secoo Trading Co., Ltd., was listed as a restricted high consumption enterprise by the court in July this year, and the total amount of the court’s enforcement for non-compliance with its legal obligations on time is as high as 21.91 million yuan ($3.2 million). It also shows that Secoo’s risk warning is over 999, and the number of court cases involved is 509, of which 90.18% are defendants.
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But the company faces more than these negatives. On August 17, it was revealed that Secoo had virtually no staff left and employee social security was cut off, a matter which the company is believed to have gotten away with with the money. However, Secoo responded that the office space has not been reduced at this time and is in normal condition.
As of the August 25 close, Secoo’s stock price was just $0.33 and its market value had fallen from $770 million at its peak to $23.6333 million. In December 2021, Secoo received a warning from NASDAQ to delist. Under NASDAQ standards, listed companies whose stock price falls below $1 for 120 consecutive days will be forced to delist. At the current pace, Secoo shares will soon be discounted.