TOKYO -- Japanese furniture retailer Otsuka Kagu will partner with an Alibaba Group Holding-backed peer in China, aiming to shore up its flagging business.

Beijing Easyhome will set up dedicated sections to display Otsuka Kagu offerings in-store. The two companies are looking into working together on online sales in China and will consider a capital tie-up down the road.

Easyhome operated about 220 stores across China at the end of last year, logging sales exceeding 60 billion yuan ($8.71 billion) in 2017. It agreed to accept a 5.45 billion yuan investment from Alibaba this year to give the e-commerce giant a 15% stake.

Otsuka Kagu, whose sales came to 41 billion yen ($368 million) last year, offers a wide variety of products planned in-house, such as mattresses and sofas. Its strengths also include procuring a variety of high-end furniture from inside and outside Japan. The company intends to provide logistics and customer service know-how to Easyhome.

Struggling to boost earnings and reeling from a family feud over control of the company, Otsuka Kagu had been hunting for business partners since summer. It booked a January-September net loss of 3 billion yen -- a fourth straight year of red ink for the nine-month period.

The company ran a clearance sale from late September, offering discounts of up to 80% in an effort to shore up sales. All-store sales logged year-on-year growth in October and November as a result.

Otsuka Kagu has accelerated store closings to save on rent. But its cash and deposit reserves have shriveled to a mere 2.2 billion yen at the end of this past September from 10.9 billion yen at the end of 2015.

（Source: asia.nikkei）