The two Daimaru stores which plan to close on December 31 have been losing money since 1990 with the total shortfall reaching $140 million by the end of last year, company officials revealed yesterday. The economic downturn and a poor outlook for the retail market were the factors that prompted the decision to shut the stores by the end of the year, officials said. 'We've tried all means to reduce our costs,' said Yukio Okada, managing director of Hong Kong Daimaru. Daimaru's legal adviser, Wong Tak-sing, said customers holding gift certificates had until December 31 to spend them, but the company would not offer cash exchanges. Outstanding gift certificates amounted to about $1 million. Tsui Ah-fai, deputy division manager of the business promotion division, said: 'It's not as though the company decided on the spur of the moment to give up on the Hong Kong market. It tried to hang on for some time, but the competition became too stiff, the rent is high and the recent economic downturn and drop in tourists also hurt sales.' The company will dismiss an initial batch of workers on October 31, with the remaining employees gradually phased out as the workload decreases.