5 Stores Closed in Q1: Red Star Macalline Sues Merchants; Easyhome Ends Large-Scale Rent Waivers

Amid fierce market competition, terminal retail stores are also facing severe tests. Recently, events such as “a Red Star Macalline mall collectively suing 38 merchants” and “Easyhome no longer offering broad rent reductions” have drawn industry attention. Financial data show that in 2026, Macalline closed 5 stores in the first quarter, and as of now has a total of 287 stores.

A Red Star Macalline Mall

Collectively Sues 38 Merchants

Recently, the Kunming Red Star Macalline Guangfu Road mall’s batch lawsuit against 38 resident merchants over lease contract disputes has drawn industry attention. Currently, some cases have completed their first-instance judgments, and some merchants are filing appeals.

Regarding the focus of this dispute, some merchants reported that they had been operating in the mall since 2019. In May 2024, this merchant signed a booth lease and management service contract with Yunnan Red Star Macalline Home Living Plaza Co., Ltd. and Kunming Red Star Macalline Expo Home Plaza Co., Ltd., with the contract term running until May 31, 2025.

At the end of 2024, the two parties developed conflicts over the issue of vacating the premises. According to the merchant, in November 2024, he formally submitted an application to vacate the premises to the mall, hoping to terminate the cooperation early, but the application was not smoothly approved. According to his description, the mall not only restricted the removal of goods and equipment, but also took measures to cut off electricity, rendering the store unable to operate normally.

Red Star Macalline, for its part, gave a different explanation. A relevant staff member responded that the mall only demanded the merchant vacate because the merchant had outstanding fees, and denied any malicious obstruction of business operations.

The two parties had significant differences on issues such as the timing of vacating the premises, the determination of responsibility, and business losses, which also became the key points of contention in the subsequent litigation. In August 2025, the two Red Star Macalline affiliated companies formally filed a lawsuit with the court, with claims including: rent of approximately 156,900 yuan; management fees, property fees, event fees, and lawyer’s fees totaling approximately 125,300 yuan, for a grand total exceeding 280,000 yuan.

It is understood that the 38 merchants sued this time all successively withdrew from the Guangfu Road mall over the past year.

On March 6, 2026, the People’s Court of Xishan District, Kunming issued a first-instance judgment on the aforementioned merchant’s case: ordering the building materials business unit to pay 132,900 yuan in rent to Yunnan Red Star Macalline Home Living Plaza Co., Ltd.; to pay 88,600 yuan in management fees to Kunming Red Star Macalline Expo Home Plaza Co., Ltd.; the merchant’s counterclaim was rejected.

Regarding the judgment, the merchant expressed disagreement and has filed an appeal; the case has now entered the second-instance proceedings.

Currently, the home furnishing industry generally faces growth pressure, and store foot traffic continues to decline. Against this backdrop, this litigation event has gone beyond a simple contract dispute, reflecting the increasingly tense interest game between the operating model of traditional home furnishing stores and their resident merchants.

Financial Pressure Stands Out

Easyhome No Longer Offers Large-Scale Rent Reductions

In recent years, affected by market competition and changes in channel foot traffic, the once high-end home furnishing stores face severe survival challenges, which has also made the relationship between merchants and stores increasingly tense.

As another representative in the high-end home furnishing store sector, Easyhome recently announced at its 2025 annual performance briefing that it will stop implementing inclusive rent reduction policies.

Regarding the issues of merchant withdrawal rate and store occupancy rate that investors generally focus on, Wang Peng, Vice President of Easyhome Smart Home, responded: the occupancy rate of the company’s directly-operated stores in core cities remains stable; the occupancy rate of the sinking market and some low-efficiency stores has been adjusted accordingly in line with store optimization strategies. Overall, during the industry’s downward cycle, the merchant voluntary withdrawal rate is at the lower end of the industry’s reasonable range. The company is continuing to promote refined store operations, and will not roll out broad, inclusive rent reduction measures going forward.

Easyhome Smart Home’s halt of inclusive rent reductions is significantly related to its financial pressure. In 2025, Easyhome Smart Home’s full-year operating revenue was 11.144 billion yuan, down 14.05% year-on-year; net profit attributable to the parent was -999 million yuan, down 229.84% year-on-year, marking Easyhome’s first loss in nearly 10 years.

In the first quarter of 2026, Easyhome achieved revenue of 2.523 billion yuan, down 23.82% year-on-year; it achieved a net profit attributable to shareholders of the listed company of 62 million yuan, down 70.65% year-on-year, still facing relatively severe production pressure.

5 Stores Closed in Q1

Red Star Macalline’s Mall Count Continues to Decline

For Red Star Macalline, the operating income brought by store rents remains under continued pressure. Financial reports show that in the first quarter of 2026, Macalline achieved operating revenue of 1.548 billion yuan, a decrease of 67 million yuan from 1.615 billion yuan in the same period last year.

Among this, revenue from the self-operated and leasing segment was 1.197 billion yuan, a slight year-on-year decline of 12 million yuan, remaining basically stable. The main reason for the decline in this segment’s revenue is a reduction in the number of self-operated and leased malls: from 74 at the beginning of the 2025 period to 72 at the beginning of the 2026 period. At the same time, the reduction in the number of managed malls also led to a 50-million-yuan decline in related revenue.

In the first quarter of 2026, Red Star Macalline announced the closure of 5 stores. These include: 1 self-operated mall, located in Chengdu, Sichuan; 4 managed malls, located in Datong, Shanxi, Heze, Shandong, Kaili, Guizhou, and Fuding, Fujian; 1 strategic cooperation mall, located in Xintai, Shandong; and 2 franchise malls, located in Xinxiang, Henan, and Yibin, Sichuan.

As of March 31, 2026, Red Star Macalline operated 73 self-operated malls, 214 managed malls of varying management depth, operated 6 home furnishing malls through strategic cooperation, and, in addition, the company authorized 17 franchise home furnishing and building materials projects through the franchise model, comprising a total of 336 home furnishing and building materials stores/industrial streets.

Overall, high-end stores represented by Red Star Macalline, Easyhome, and others all face the same operating pressures: store contraction, declining rents, and strained merchant relationships. In the critical window period of the industry’s overall transformation, whether they can transform from the “landlord” role into a servicer and enabler will determine whether they can emerge from their current predicament.