Seller's HomeGoing global is not easy, especially when external variables increase sharply.
Recently,Shenzhen Huijie Group Co., Ltd. announced that it would terminate the operation of its sub-brand understance, which targets the North American market, citing the frequent adjustments of Sino-US and US-Canada tariff policies in the past year and increased uncertainty in the future as the core reasons.
The understance brand was fully operated by Huijie Shares in Vancouver, Canada, and was once an important part of the company's internationalization strategy. According to preliminary estimates, this decision will bring a direct loss of 34.02 million yuan to the company.
01
Tariff changes are the trigger
The announcement on the termination of the understance brand operation clearly stated: "In view of the frequent changes in Sino-US and US-Canada tariff policies in the past year, and the uncertainty of future Sino-US and US-Canada tariff policies cannot be ruled out, the company has decided to terminate the operation of the understance brand and gradually clear inventory."
The uncertainty of tariff policy has become the last straw to crush this going-global brand.
Since 2024, Sino-US trade relations have continued to fluctuate and related policies have been frequently adjusted. As a brand designed specifically for the North American market, understance's products need to establish a stable and predictable logistics and trade chain between China, the United States and Canada from design to sales, and policy changes have destroyed this stability.
Huijie Shares listed in detail the financial losses caused by the termination of the brand operation in the announcement.As of November 30, 2025, the book value of understance brand inventory is approximately 10.49 million Canadian dollars (unaudited), and it is expected that a provision for inventory depreciation of approximately 18.10 million yuan should be made in the fourth quarter of 2025.
In addition to inventory losses, the company will also face direct losses from warehouse lease termination. According to the announcement, the Canadian subsidiary EASY INTIMATES LTD. reached a termination agreement with the lessor on the matter of North American warehouse lease termination. The North American warehouse was leased in advance on September 30, 2026, and will pay the lessor a termination fee of approximately 3 million Canadian dollars. It is expected that the termination fee and deposit loss caused by the early termination of the North American warehouse will cause a one-time loss of approximately 15.92 million yuan to the company in 2025 (based on the exchange rate of 1 Canadian dollar ≈ 5.07 yuan).
In total, the termination of the understance brand operation will bring direct financial losses of more than 34 million yuan to Huijie Shares.
02
Preparations for brand exit have already started
There were signs of Huijie Shares' brand strategy adjustment early on.
Understance was launched in June 2021, targeting the North American market; in November this year, it was announced on social media that it would permanently close three physical stores opened in Canada on December 1, among which the Toronto store opened on November 19, 2024, and operated for just over a year.
The understance brand is a relatively young part of Huijie Shares' brand matrix. In the first half of 2025, the North American market where understance is located contributed approximately 31.105 million yuan in revenue to Huijie, accounting for only 1.98% of the total revenue. It is worth noting that the vast majority of Huijie Shares' revenue depends on the Mannifen brand, with a revenue contribution rate of 70.59% in the first half of this year.
The limited contribution of new brands and the weak growth of core brands coexist, forcing the company to make choices.
As a try of the company's internationalization strategy, the termination of understance operation means that Huijie Shares will temporarily shrink its international business and focus its resources more on the domestic market. The company has clearly stated that it will continue to focus on the development of core brands and the domestic market in the future.
Domestically, Huijie has a mature brand matrix and channel network, including Mannifen, Yives, Landuo Li, Sangfulan, etc., covering department stores, shopping centers, outlets, e-commerce and live streaming and other scenarios, with stronger anti-volatility capabilities.
At present, Huijie Shares has started the liquidation work of the understance brand. According to the announcement, the Canadian subsidiary Easy Intimates Ltd. has reached an agreement that its North American warehouse will be leased in advance on September 30, 2026.
The North American market is not without opportunities, but it is more sensitive to tariffs and compliance. After this adjustment, the company is likely to adopt the pace of "small steps and fast running, light asset testing", and prioritize the allocation of resources to the domestic market and core categories with more controllable returns.
The information in this article is for reference only and is not used as the basis for investment decisions
