JapanConsuming Headlines: October 2014

by Roy Larke on October 6, 2014


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All brands & companies covered in JapanConsuming this month

Apparel Retailing FY2013: the best year in 15
Apparel sales powered ahead last year, driven by consumer demand, excellent retailing and a stronger emphasis on value rather than price. With the exception of GMS stores sales rose across all formats – even at department stores. Displaying its boundless dynamism, the apparel industry once again included retailers achieving exceptional sales growth, with no fewer than four firms up more than 40% and 16 more than 10%. With little room for price competition and much of the nation replete with apparel retailing, all agree the challenge now is to improve product and marketing, and to create chains that stand out from the crowd.

RIP: Aeon to delete Daiei
Aeon will shortly make Daiei a wholly owned subsidiary and delist the company’s stock. This means that Japan’s biggest retailer from 1972 to 2000 will finally meet its end – a fate it had previously avoided thanks to government support and funding. The simultaneous confirmation that Aeon will also wipe out the Daiei brand has saddened many in the industry, but Japanese retailing has changed to the point that few will have been surprised.

Editorial: Unassailable Aeon

Aeon’s station mall model to launch in Okayama
Aeon’s SC expansion has been unprecedented in the last 10 years, so much so that new SCs pass in a blur. Aeon makes many claims for new malls, with each one presented as the latest, mould-breaking new model, but in Okayama in December Aeon will genuinely open one of its most important SCs in years. It is a model for its planned takeover of station retailing across the country, making Aeon an ever more important partner for international and domestic brands and retailers in food, fashion, and the home.

Brunello Cucinelli Japan expands
Luxury brand Brunello Cucinell is now in charge of its own distribution in Japan. Sales are up and much needed investment in upgrading department store concessions will continue this year culminating in the opening of a flagship in Ginza in Autumn 2015.

Isetan-Mitsukoshi: small store expansion continues, emphasis on clearer targets
Isetan-Mitsukoshi continues to take direct control of parts of its sales floors and expand its new network of small format, specialty retail stores. In its department stores, new sales areas are being turned into self-managed concessions and mini shopping centres in order to clarify the positioning of each branch to better suit local traffic. The latest areas include a select shop for the over 60s in Nihonbashi and a mini SC for working women in Kyushu. Meanwhile, specialty chain MI Plaza will see a significant boost to store numbers. All of this means opportunities for overseas brands.

Start Today cancels free shipping
Start Today introduced free shipping in 2012 in the face of growing competition from Amazon, which had already lured some of its key merchants like United Arrows to its mall. The service was always going to be expensive for a business that relies on the consignment model, and last month it capitulated, introducing charges again for low value shipments. Instead, however, it is offering free shipping for same day delivery around Tokyo, the first time an online store has introduced such a service.

Shosha invest in e-commerce
The rapid growth in e-commerce is leading to huge demand for state of the art distribution facilities and support. With Amazon Japan leading from the front, all the major players, and even the smaller ones, are now expected to provide short lead times at very low cost to the final customer, but few have the volume to justify their own, large DCs, creating a growing market for logistics providers. Enter the four big trading houses.

Lawson to acquire Seijo Ishii
Lawson will add its second major acquisition for the year this month, taking over leading upscale supermarket chain Seijo Ishii. It is no surprise that Mitsubishi’s convenience store subsidiary should want to add another supermarket banner to its portfolio, although Isetan-Mitsukoshi is disappointed to have been overlooked.

Working population declines by 4 million in 5 years
Depopulation in Japan often seems like old news, but the real consequences are only now beginning to be fully understood. Already medium sized cities in the outer regions, especially in the north, are being hit by population decline so rapid that there’s no longer enough money to sustain even some basic services, and it is about to get worse. Depopulation does not just mean fewer consumers, it also means higher local taxes, further reducing consumers’ capacity to spend on non-essential items. For overseas firms working in Japan it’s increasingly important to understand not only where the problem areas will be, but equally where opportunities will arise in a small number of growing municipalities.

Sazaby sells Starbucks stake
Sazaby is selling its majority stake in Starbucks, a business that transformed Sazaby’s turnover, although it still managed to retain its identity as a quirky fashion to interiors business. By selling off Starbucks Japan, it can return to its roots, but still with plenty of potential growth from chains such as Flying Tiger. It will add more overseas brands, and with its bulging coffers and record of past successes, would make a great partner.

Familymart signing more cross-retail deals
With Seven Eleven and Lawson adding around 1,000 new stores a year, and Lawson rapidly diversifying out of just convenience store retailing, number three chain Familymart is fighting to keep pace. To make up for this it is now looking at joint venture tie-ups to allow it to expand its brand and supply chain more widely. Will this be enough to keep it in the game?

Distribution industry offers full-time contracts amid staffing crisis
The distribution industry is one of the biggest employers of part-time labour, relying on flexible, low paid people to run stores and supply centres. The problem is that there are fewer and fewer people around to do these largely mundane jobs – many young people see working in restaurants as far more fun. Now companies are looking for solutions to the short-fall by offering later retirement and the chance to jump from part-time to permanent contracts.

Retail Data: Department Stores steady, down just 0.3%

News in Brief
Metrocity opens pop up store in Takashimaya
Yagi Tsusho signs Helen Kaminski and Lorena Antoniazzi
Singapore’s Croesus expands in Japan
Itochu Shoji signs Casabella
Kintetsu downgrades profit forecasts as Abeno Harukas flops
Post Office renews store concepts, move towards retailing
Uniqlo to double childrenswear sales
Ginza6 begins tenant selection
Household financial assets rise as cautious consumers save
Ikebukuro gets new SC
Duty free sales up 30% at Takashimaya and 50% at Tokyu
Ageless fashion for mothers and daughters
Sogo trials virtual fitting rooms
JR East renovates Mitaka Station SC
Bic introduces free wifi for tourists
Seiyu announces price guarantee for veggies
Import brand market up 20%
Aeon to acquire Red Cabbage
Seven & I joins with Fancl for new PB
Muji to enter India
World plans more accessory and home stores

Company and Brand Index this month
Numbers indicate page of report:

A-Coop, 10
Abeno Harukas, 4
Adastria Holdings, 13
Aeon, 1,2, 7,8, 10,11, 13, 15
Aeon Mall, 3
Amazon Japan, 7
Aoki Holdings, 15
Athena New York Girl, 5
Atmos, 7
Atre Vie, 8
Bape Kids, 5
Beams, 5
Berluti, 6
Bic Camera, 9
Big A, 1
Brunello Cucinelli, 4
Casabella, 4
Charles & Keith, 4
Ciaopanic, 4
Circle K Sunkus, 10
Cox, 15,16
Credit Saison, 10
Croesus Retail Trust, 3
Cross Company, 3, 15,16
Dila, 9
Disney, 6
Doshisha, 4
Dunoon, 4
Egoist, 16
Espritmur, 15
F. T., 15
Familymart, 10
Familymart A-Coop, 10
Fancl, 10
Fast Retailing, 5, 11
Fendi, 6
Flying Tiger, 9
Food Maison, 3,4
Forever 21, 13
Fray I. D., 13
Freek’s Store, 4
Fukulog, 6
Gelato Pique, 13
Global Work, 15
Grameen, 11
GU, 13, 16
Hakuhodo, 7
Havaianas, 4
Helen Kaminski, 3
Hello Kitty, 6
HMV, 8
Honeys, 16
Inditex, 13
Isetan, 5, 7
Ito-Yokado, 11, 13, 15
Itochu Shoji, 4
Izumiya, 10
J Front Retailing, 6
Japan Imagination, 16
Japan Post, 5
JR East, 8
Keikyu, 15
Kintetsu Department Store, 4
Koe, 16
La-Boo, 6
Laura Ashley, 15
Lawson, 718, 10
Le Style Kids, 5
Le Style Lady, 5
Limited Edition, 8
Little Marc Jacobs, 5
Loft, 10
Lorena Antoniazzi, 3
Mac House, 16
Malie, 9
Maruetsu, 1
Marui City, 9
Maruoka Shoji, 16
Mash Holdings, 13, 15, 16
Matsuya, 15
Metrocity, 3
MI Plaza, 2, 5
Mina Perhonen, 5
Mitsui, 7
Mitsukoshi, 5, 7
Muji, 10,11, 15, 16
Mycal, 1
Niko and…, 13
Nissen, 15
OPA, 3
Orihica, 15
Pal, 16
Picard, 2, 4
Printemps Ginza, 9
Queens Isetan, 7
R. Newbold, 4
Rachel Ashwell, 9
Rakuten, 7, 15
Raquel Allegra, 9
Red Cabbage, 10
Reins International, 7
Ryohin Keikaku, 15
Salvatore Ferragamo, 2
Sazaby League, 9
Seibu, 4, 8, 10, 13
Seijo Ishii, 718
Seiyu, 9, 11, 15
Sense of Place, 15
Seven Eleven, 10, 15
Shimamura, 16
Snidel, 3, 13
Sogo, 8, 10, 13
Solaha SC, 5
Starbucks, 9
Start Today, 6, 13, 15
Stella McCartney, 5
Sterne International, 3
Studio Clip, 13, 16
T-point, 10
Taka Q, 15
Takashimaya, 2, 7, 15
Temasek Holdings, 7
Tenmaya Department Store, 3
Tod’s, 2, 3
Tokyo Midtown, 5
Tokyu Hands, 4
Toppan Printing, 8
TopValu, 15
Trinity Arts, 13, 16
Uniqlo, 5, 6, 11, 13, 15, 16
United Arrows, 3, 5, 6, 16
United Cinemas, 8
Urban Research, 4, 8, 15, 16
Wacca Ikebukuro, 7
Walmart, 1
Wear, 5, 6
World, 2, 11, 13
Yagi Tsusho, 3
Yaoko, 7
Zara, 4
Zara Home, 4
Zozotown, 6
Zozoused, 6

JapanConsuming Headlines: September 2014

by Roy Larke on September 6, 2014

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All brands & companies covered in JapanConsuming this month

Focus: Department Stores FY2013: a blip or a sustained recovery?
Sales at department stores rose for the first time in 16 years in 2013 and by a solid percentage too. The uplift came from a splurge of high ticket consumption prior to the tax hike, investment in renovation and enlarging of city centre stores – not to mention much better management. Will it last? While the tax hike bonus was clearly temporary – even with another one due next year – there is a sense that the dark decades are over, and department stores have entered a more stable age, a boon for premium overseas brands. Overall the sector will continue to shrink as more stores still need to close or convert to shopping centres, but the leading businesses and stores are in good shape, showing unprecedented levels of innovation and retail marketing.

Buoyant import fashion market spurs new deals and stores
Strong sales at department stores and select shop chains mean demand for premium overseas brands continues unabated. This benefits not only the brands themselves, but also distributors, leading to a resurgence in activity, even among the former dullards of the industry like Toray Diplomode. Others such as Look are going from strength to strength.
Editorial: When dinosaurs return

¥100 Shops enter new era of growth
Although the impact of the April tax increase is now dissipating for many sectors, it has refocused consumers on price. Lower priced retailers in the FMCG and discount sectors have done particularly well. The four major ¥100 Shop discount chains are all looking to expand store numbers rapidly this year.

Wages up for four straight months but incomes fall
Government PR is making much of the fact that wages have risen for four straight months for full time workers. It is making less noise about the 3.2% fall in real incomes. Coupled with the fact that wages are still below the levels of 2010 and much of the increase was due to labour shortages, suggests the lack of real growth in wages and incomes in Japan might become a significant break on consumption and Japan’s medium-term prosperity.

GMS apparel sales shrink further but signs of revival
GMS share of the apparel market continues to shrink, with sales down again last year. There is some glimmer of hope as the top chains expand store merchandise, design better apparel floors, and in many cases, hand over space to specialty tenants, with some even making a profit.

Xebio opens Next flagship
The history of joint ventures and franchises between UK apparel retailers and Japanese partners has not been a happy one on the whole. Oasis, Warehouse and French Connection are just some of the chains which have opened with a bang and then left the market soon after. The UK giant Next is still here after 18 years even though its partner has built a chain of just 15 stores.

Department stores expand own brands and small format retailing
Isetan-Mitsukoshi is leading the charge to diversify into small format retailing and raise the ratio of private brand product in department stores (see Focus, Page 13), but other department store groups are working hard to catch up. Daimaru-Matsuzakaya has just unveiled two shoe brands and Tokyu has created an accessories specialty chain.

Mitsukoshi Ginza to house 3,000 sqm duty free store
Tourism has helped boost city department store revenues by as much as 10-15%, but until now the only real benefit for foreign customers has been the consumption tax rebate – and even that is highly restricted at present. Isetan-Mitsukoshi will go one further next year, opening a dedicated duty-free store that will sell luxury brands free of both consumption tax and import duties. Aeon and Ito-Yokado are introducing tax-free services too.

Aeon to setup SC-based nurseries in 46 prefectures
Aeon is planning to open childcare facilities in each of its 140 SCs across the country, with a target of at least one in each prefecture by 2018. A key aim is to provide extended hour services for its own employees in a bid to help expand the number of female managers, but it will also go some way to offset the chronic shortage of childcare facilities in Japan.

Top wholesalers see sales grow 4% in FY2013 but profit falls for many
Japan’s wholesale sector enjoyed higher sales in 2013. In food and household products, huge wholesalers continue to play a prominent role in the distribution channel, as traditional intermediaries, but even in some cases as budding retailers in their own right. An overall increase in profitability was largely due to the better performance among pharmaceutical suppliers, with both food and apparel wholesalers struggling with costs.

Amazon promoting retailer brands
Amazon Japan has launched a new sub-site selling private label products from 15 major retailers. The site brings together multiple sports, home centre and pet chains as well as drugstores and one supermarket. This is yet another sign of the growing popularity of retailer private brands.

Retail Data: Department store sales fall 2.5% in July

News in Brief
Aoki to introduce iBeacon smartphone service in October
Rakuten to close Play.com
Cross Company launches cosmetics chain
Aeon to open The Coffee Bean & Tea Leaf
Fred Segal flagship due in Daikanyama in 2015
Lawson and Seven Eleven introduce private brand pet foods
@Cosme buys GlossyBox
Isetan-Mitsukoshi Osaka to house Tsutaya
Parco to add new building in Nagoya following Zerogate opening next month
Tokyu Hands opens in Singapore
Venus Fort updated with 35 new tenants
Kenmin Department Store closes
Itochu buys Renfro stake
IKEA aiming for 14 stores by 2020
Aeon opens in Phnom Penh
Samantha Thavasa launches new apparel brand
Big jump in ‘net dependent’ consumers
Consumers “shun” McDonalds
Joyful Honda has poor first year after IPO
Former Sogo chairman passes away
Tohoku sees further supermarket mergers
126 retail bankruptcies in July
Tokyu Department Store to open second Thai property

Company and Brand Index this month
Numbers indicate page of report:

Adelina, 8
Aeon, 1, 4, 6, 11
Akachan Honpo, 16
Alex and Ani, 3
Amazon, 1, 11
American Eagle Outfitters, 6
Aoki Holdings, 3
Aquilano-Rimondi, 3
Arcs Group, 11
Asme Estelle, 8
Bamford, 3
Beauty Trend Japan, 5
Blue Les Copains, 3
Borbonese, 3
Brooklyn Charm, 3
Burnedest Japan, 9
Cainz, 11
Caitac International, 1
Cando, 4
Caravan, 3
Color the Days, 4
Coronet, 1
Costco, 7
Cross Company, 314
Cross Plus, 7
Daiei, 6
Daimaru-Matsuzakaya, 8, 14, 17
Daiso Sangyo, 4
Don Quijote, 4
Eastpak, 1
EspadrilleSW, 7
Espritmur, 6
Faliero Salti, 3
Familymart, 9
Fast Retailing, 7
Felissimo, 7
Fleurs de Rhum, 3
Forever 21, 6
Fred Segal, 4
French Connection, 7
Galloria Prestige, 7
Gant Rugger, 3
GlossyBox, 5
Glow, 6
Grace Continental, 3
Hankyu-Hanshin, 13
Harrods, 2
Honey Bunch, 9
Isetan-Mitsukoshi, 2, 5, 8, 11, 13, 14
Isetan-Mitsukoshi Holdings, 8
Isetan-Mitsukoshi Osaka, 5
Island, 3
Italian, 1, 3, 7
Ito-Yokado, 6, 16
Itochu Home Fashion, 1
Itochu Shoji, 1, 7
Itochu Shokuhin, 11
Itokin, 3
Iwataya, 7, 14
Izumi, 6
Izumiya, 6
Izutsuya, 15
Jack Wolfskin, 3
Jerome Dreyfuss, 3
Joyful Honda, 10
Junkudo, 16
Keikyu, 13
Kenmin Department Store, 7
Kintetsu, 14
Lawson, 4, 10
Liniere, 7
Loft, 16
Look, 113
Mark Styler, 4
Marui, 13
Matsumotokiyoshi, 11
Matsuya, 14
Maverick, 7
McDonalds Japan, 9
Misaki Shoji, 3
Mitsubishi Shoji, 1, 6
Mitsui, 3
Muji, 7
NAA Retailing, 8
Next UK, 7
Nihon Access, 10
Nike, 7
Nippon Steel Sumikin Bussan, 3
Oban Holdings, 11
Onward, 11
Parco, 6, 17
Persodea, 6
Pinkberry, 7
Rakuten, 3
RedyAzel, 9
Renfro, 7
Restir, 6
Rodesko Urban Research, 6
Samantha Thavasa, 9
San-A, 6
Sanki Shoji, 3
Sann Freres, 3
Sanrio, 8
Seijo Ishii, 11
Seiyu, 617
Sense of Place, 6
Seria, 4
Seven-Eleven, 16
Shimamura, 7
Shoo La Rue, 7
Sogo Seibu, 9, 13, 16
Sports Authority, 11
Stradivarius, 6
Takarajimasha, 7
Takashimaya, 2, 13, 14
Tara Jarmon, 3
Tenmaya, 15
Tokiwa, 15
Tokyu Department Store, 8, 11
Tokyu Hands, 6, 8, 11
Tokyu Show Slice, 8
TopValu, 6, 8
Toray Diplomode, 1, 3
Toshin Kaihatsu, 16
Tsutaya, 5
Ueno Shokai, 3
Uniqlo, 617, 16
Uny, 6
Urban Research, 6
Venus Fort, 6
Vera Bradley, 1
Walmart Seiyu, 6
Watts, 4
Woolrich, 3
World,, 7, 11
Xebio, 1,
Yagi Tsusho, 3
Zerogate, 6

JapanConsuming Headlines July/August 2014

by Roy Larke on July 8, 2014


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All brands & companies covered in JapanConsuming this month

Focus: Sales peak or new beginning? Retail results FY2013
FY2013 retail results were heavily influenced by both renewed consumer confidence and increased spending spurred by the pending tax increase, but they also represent a new benchmark for the industry. Whereas a decade ago, the high performing retailers stood out as the exceptions, last year the opposite was true, with just a small number of strugglers in the top 50. Some worry that this represents a peak for some companies, but given the way the industry has evolved, it’s more likely to be a starting point for the next phase.

Marui to switch to SC model
Marui is often classified as a department store because most of the brands in its buildings are contracted on a concession basis, just like a traditional department store, even though many of the tenants are specialty chains. This definition also makes sense given Marui’s low level of profit, partly the result of this same operating model. Marui will finally fix this, shifting its entire portfolio of stores to the shopping centre model by 2018. More stable revenues and higher profits should follow, and the switch in contracts will mean an overhaul of tenants too.

44% of consumers shopping online
The government’s Consumer Bureau recently completed a survey of consumer mindsets and problems. Many of the problems identified will be of little surprise, but the results confirm once again a continued shift towards online shopping – including purchases overseas – and how much that will effect the market as a whole.

Isetan, the women’s specialty chain
Isetan-MItsukoshi enjoyed a significant jump in turnover last year and is optimistic about the future – a future where the department store moniker will be increasingly inappropriate. It is already well advanced in rolling out small store chains, but its latest initiative to create a specialty women’s fashion chain is the project with the most potential.

Aeon to make Daiei a supermarket, may scrap Daiei brand
Aeon has announced plans to turn Daiei into a supermarket chain, handing over the recently acquired chain’s regional GMS outlets to other Aeon businesses. With every expectation that Aeon will turn Daiei into a majority owned subsidiary in the next 12 months, the chain’s new major shareholder is keen to reposition Daiei and make it work effectively with other assets in the Aeon Group.

Department stores reporting strong luxury sales
Despite fears of a downturn following the consumption tax increase in April, sales in many sectors remain strong. Although sales of high end art and jewellery sales were frenzied in March and remain weak as a result, department stores are reporting strong sales in luxury brands even now.

Itochu signs yet more brands
Itochu has more than 150 brands under management, with a portfolio management style akin to a music conglomerate, continually questing for new prospects. Its latest signings include Emanuel Ungaro, Eastpak, Hunter and Breuer, all on behalf of Coronet, which is becoming a major player in brand distribution once more.

Lawson to expand drugstores
Lawson is set to expand its directly operated drugstore business. With all major convenience store players expanding into the same area, Lawson will add both more franchise partners from existing drugstore chains and convert around 500 of its own convenience stores to drugstores, as well as open new, directly operated Lawson Drug outlets.

Magaseek expands fashion e-commerce for NTT Docomo
NTT Docomo’s fashion e-commerce venture, dfashion, has been operating for six months and is slowly garnering a share of the mobile fashion market – in particular it looks like being a useful source of sales if you sell to men – but faces stiff competition from entrenched players.

Virtual changing rooms: a marriage of online and retail
Various attempts have been made to make virtual changing rooms a reality, but the technology has so far been more of a toy than a tool with genuine commercial potential. Using new software, Urban Research tested its first stand alone virtual changing room store last month. It hopes a chain of such stores could bridge the gap between online and offline retailing, and even imagines staff-less stores akin to photo booths in stations and SCs.

People shortage hitting regions and retailers quicker than expected
Japan faces a massive drop off in population over the next two decades, but the effects of internal emigration out of rural areas into the cities has increased beyond expectation in the past two years. This will have major implications for consumer goods marketers in the future who will need to start planning now. For retailers too, the growing shortage of low cost part-time workers in these areas is becoming a serious one, causing major chains to begin rethinking their entire business model.

Baroque unveils global brands
Thanks to its Chinese shareholders, Baroque Japan is now gearing up for a new life as a multinational fashion retailer. Last month it showcased four new apparel brands aimed at both increasing market share at home and accelerating expansion in Asia, while also launching a new footwear chain.

Retail Data: May sales not bad at all

News in Brief
Tiffany to open stand alone in Shinjuku, Coach too
IKEA Japan to open 8th store
Women to live over 90 on average
GU opens in Shibuya Parco with GU Fitting service, announces 5% price increase
More mega SCs planned
MAC opens new concept store
Urban Research ties with The Body Shop
Locondo ties with Base to help overseas brands into Japanese e-commerce
Sumitomo signs with JRunway
Blue Bottle Coffee comes to Japan
H2O Retailing up 10% in 2013
Nomura Real Estate plans neighbourhood SC development
Amazon Japan launches designer’s baby store
Seibu Ikebukuro to refurbish street and basement levels
Kohnan Shoji ordered to stop sale of unapproved ELECTRONICS
Tokyu to build new SC in Shibuya
Forever 21 in Nagoya
United Arrows reports good start to Bow & Arrows
Takashimaya begins home delivery of fresh foods
Retail sales holding steady
Beisia moving into drugstores

Company and Brand Index this month

ABC Mart
Adastria HD
Aeffe SpA
Aeon Group
Aeon Retail
Aim Create
Ain Pharmaciez
Aoyama Shoji
Barneys Japan
Baroque Japan
Belle International
Best Denki
Bic Camera
Big A
Blue Bottle Coffee
Cawachi Yakuhin
Christian Louboutin
Cocokara Fine
Cosmos Yakuhin
Daimaru Matsuzakaya
DCM Holdings
Don Quijote
Elle Japon
Emanuel Ungaro
Fast Retailing
Fijian Water Lotus
Forever 21
Frame Japan
Garment Seven
Gourmet City
H2O Retailing
Hankyu Hanshin
Hankyu Mens Osaka
Hankyu Umeda
Itochu Shoji
J Front Retailing
John Lobb
Joshin Denki
JR East
JR West
Kohnan Shoji
Lawson HMV
Louis Vuitton
Lucien Pellat-Finet
Lumine Est
Magnolia Bakery
Mitsui Real Estate
Mujirushi Ryohin
Nomura Real Estate
NTT Docomo
Ocean Pacific
Old Navy
Peggy Lana
Prime Garden
Raf Simons
Ralph Lauren
Right On
Ryohin Keikaku
Seven Eleven
Sogo Seibu
Sugi Yakkyoku
Sumitomo Shoji
The Body Shop
Tokyu Department Store
United Arrows
Urban Research
Yamada Denki
York Benimaru

JapanConsuming Headlines: June 2014

by Roy Larke on June 8, 2014

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All brands & companies covered in JapanConsuming this month

Focus on Drugstores: convenience stores for women
Drugstores were mostly small, independent stores or small regional chains as recently as 10 years ago. Today they make up one of the most dynamic retail sectors in the country. In volume it is about to become the latest retail sector to overtake department stores, and is one where, again, Aeon dominates with 22% share. Consolidation and further modernisation is on the cards. This and the diverse formats and even wider array of merchandise mean they are an increasingly important conduit for a multitude of consumer brands from cosmetics to food, and a great channel to reach women.

April and May retail sales steady
Retail sales fell in April as expected, and by marginally more than in 1997, but the industry still performed well and the extreme decline feared by manydid not happen. Indeed, many chains were reporting that sales were back to levels seen in 2013 by the end of the month and others were already back on track in May.

Editorial: Where are the local luxury brands?

Burberry takes control in Japan
As expected Burberry will cancel its main licenses in Japan next year. Headlines quoted plans to quadruple sales in Japan but the actual sales referred to were Burberry’s existing direct operations in Japan, not licensees. There is nevertheless a clear intention to invest heavily in growing the Japanese market, especially retail investment. Sanyo Shokai is at last moving on, licensing a new label from UK brand Mackintosh called Mackintosh London, which it hopes to open in many current Burberry concessions, but competition for this space will be stiff.

Delvaux sets up shop in Japan
One of the oldest and most exclusive European bag brands is finally coming to Japan thanks to investment by Li & Fung. Delvaux will open here in August and plans a string of stores and concessions over the next five years.

Small city supermarkets: the latest food format begins to take-off
Convenience store expansion has passed its peak and retailers are looking for new solutions for small footprint food retailing. The number of c-stores exceeded 50,000 in November, reaching 50,890 stores in February and then dropping in March. With the exception of sector leader Seven Eleven, all the major chains, along with various supermarkets (see Page 5), have begun to shift away from the standard and ubiquitous 100 sqm, snack food filled stores.

Inditex rolls out new stores, Zara Home breaking records
Inditex Japan now has four of its Spanish parent’s brands operating here, and based on plans for the rest of this year, looks like entering a new phase of expansion, creating one of the largest foreign retail businesses in Japan. Stradivarius’s launch in Japan in January and Zara Home’s new flagship in Aoyama were met with such success that Inditex must surely be considering other house brands for this market.

Aeon to consolidate supermarket interests, create new Kanto chain
Having announced a consolidation of drugstore interests back in March, in May Aeon said it plans to establish a new operating company for three of its main supermarket interests in Tokyo, with other Kanto companies joining in later phases. While long expected, the news brought a flurry of speculation as to future moves. An openly consolidated structure not only challenges Seven & I in the capital, it also signals a new push by Aeon to grab market share. There’s even talk of Uny becoming a takeover target.

Ace: a travel solutions business
Ace is Japan’s biggest home-grown luggage firm, despite losing both Samsonite and Tumi over the last decade. As well as signing replacements, it is also investing heavily in its own brands with plans to globalise distribution over the next few years with the help of US subsidiary Zero Halliburton and Italian partner Pelletteria Clio.

Japan Post to launch e-commerce and fulfilment service
Japan Post will be publicly listed next year and has been preparing a move into a brasher, more commercial world for years. Its latest plan is to exploit its trusted brand, post office network and logistics to create a one stop shop e-commerce service emulating the merchant services of Rakuten and Amazon and the logistics capabilities of Yamato and Sagawa.

Aeon: switching to city centres
Shopping centres are at the heart of Aeon’s business. By late 2016, Aeon will have completed a series of large scale malls stretching across the country, including improved entertainment features, better location targeting, and improved integration with other retail banners in the group. The only problem is that 70% of Aeon’s existing malls are in areas where populations are set to decline markedly by 2025 and it is nearing capacity in the regions, explaining the retail giant’s new found enthusiasm for city centres.

Snap your fashion desires
New ways to use smartphones to find great fashion continue to emerge, the latest launching last month in London combining scanning technologies with social networking that could threaten home-grown apps like Wear, while providing new ways to market fashion.

Retail Data: Department stores down 12% in April

News in Brief
Old Navy sets up in Kanazawa, increases store opening pace
Takashimaya & H2O RETAILING to expand merchandise collaboration
Iwataya Mitsukoshi to target younger crowd with new fashion floor
QVC Japan breaks ¥100 billion
Bra sizes INCREASING says Triumph
Mitsubishi increases stake in Life supermarket
Italian brand Fix Design in Japan
Restaurant sales up in April DESPITE TAX INCREASE
Aeon Mall delays shopping mall opening due to cost increases
Sazaby signs Hawaiian organic cosmetics brand
Bic Camera ties with Radishboya
Stores.jp ties with Parco
Lasalle buys Malera Gifu
Coach to open Shinjuku flagship
Mitsubishi Estate-Simon sees sales up 12%
Familymart ties with Fujio Food, opens new convenience store hybrid
Seven Eleven begins rollout in JR West stations
United Arrows to open sports store with running station
Arcs to merge Belleplus and Jois
GU hits 11 million online members
Futako Tamagawa Rise set for completion in 2015.
Familymart renews its loyalty point system
Rakuten opens delivery lockers in Osaka
Aeon and Sapporo launch discount beer

Company and Brand Index this month
Numbers indicate page of report:

A Colle, 7
Ace, 1, 8
Aeon, 1, 5-8, 10-11, 13-15
Aeon Malls, 10
Aeon Welcia, 14
Ain Pharmaciez, 13-15
Amazon, 9-11
Aoki, 13, 15
Apita Town, 3
Asap54, 11
Asics, 9
Atelier Fixdesign, 5
Azabu Provador, 4
Belc, 7
Belleplus, 9-10
Bershka, 6, 8
Bi Garden, 13
Bic Camera, 7
Big A, 7
Brand Avenue, 11
Burberry, 1-4
CCC, 10
Chanel, 1
Circle K Fresh, 6
Circle K Sunkus, 6, 8
Coach, 8
Cocokara Fine, 14-15
Cosmos Yakuhin, 13, 15
Daiei, 7, 14
Delvaux, 1, 4
Dentsu, 11
Descente, 9
Edion, 8
Ellegirl, 11
En Route, 9
Epoca, 3-4
F. Clio, 8
Familymart, 5, 8, 10, 14
Famima T-Point, 10-11
Fast Retailing, 10
First Heritage Brands, 4
Fuji Yakuhin, 14
Fujio Food System, 9
Fukulog, 11
Fukusuke, 2
Futako Tamagawa Rise, 10
Gap Japan, 3
Gourmet City, 7
Gyre, 4
H2O Retailing, 3, 6
Hapicom, 14-15
Inageya, 7
Inditex, 1, 6
Instagram, 10
Isetan-Mitsukoshi, 4, 9
Ito-Yokado, 1, 7
Iwataya Mitsukoshi, 3
Izumiya, 5-6
J Front, 7
Jois, 9
JR East, 10
JR West, 4, 9-10
Kanematsu Textile, 4
Kasumi, 7
Kawachi Yakuhin, 13
Kojima, 7
LaChic, 3-4
Lalaport Izumi, 6
Lasalle Investment Management, 8
Lawson, 5, 10, 13-14
Lawson Mart, 5
Life Corporation, 5
LINE, 10-11
Louis Vuitton, 1, 6
Loveless, 3
Lumine, 11
Mackintosh London, 3-4
Mai Basuketo, 6-8
Maido Okini Shokudo, 9
Malie Organics, 6
Marco Probst, 4
Maruetsu, 7
Massimo Dutti, 6
Matsumotokiyoshi, 13-15
Maxvalu, 7, 11
Medipal, 14
Meitetsu Department Store, 6
Milestone TM, 6
Mini Piagio, 6
Ministop, 7-8, 11
Mitsubishi Estate-Simon, 8
Mitsubishi Shoji, 5
Mitsubishi Shokuhin, 5
Mitsui Bussan, 4
Mitsukoshi, 3-4
Muji, 8
Natural Lawson, 5
Nihon Chozai, 15
Offerman, 8
Old Navy, 1, 3, 8
Parco, 7, 16
Paul Stuart, 3-4
Peacock Stores, 7
Pelletteria Clio, 8
Pieri Moriyama, 6
Qol, 14
QVC, 4
Radishboya, 7
Rakuten, 4, 9-11, 15
Robstep Japan, 6
Ron Herman, 7
Samsonite, 8
Samty, 6
Sanyo Shokai, 2-4
Sazaby League, 6
Seiyu, 1
Seven Eleven, 5, 7-10, 13
Shimeno Yakkyoku, 14
Shimizu Yakkyoku, 14
Snap Fashion, 11
Sotetsu Rozen, 7
Start Today, 7, 11
Stradivarius, 1, 6
Sugi Holdings, 14-15
Sundrug, 13-14
Takada Yakkyoku, 14
Takiya, 14
Tanjosai, 9
Terashima Yakkyoku, 14
Tobu Stores, 7
Toho Cinemas, 8
Topvalu, 7
Triumph International, 5
Tsuruha, 15
Tumi, 8
United Arrows, 9
Uny Holdings, 6, 8
Welcia Holdings, 14
Yagi Tsusho, 4
Yumetembo, 4
Zara, 6, 8
Zara Home, 6
Zero Halliburton, 8

JapanConsuming Headlines May 2014

by Roy Larke on May 6, 2014

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All brands & companies covered in JapanConsuming this month

Focus: Retail groups: M&A to shape retailing future
Retailing in Japan has been consolidating since the late 1990s, starting with Itochu’s acquisition of Familymart from the now defunct Seibu Saison Group, and the bankruptcy of Sogo soon after. After several years of tentative exchanges and realignments, M&A has at last become a core part of retail strategy, just as it is in many other countries. Over the past three years, the pace of consolidation has continued to increase. We’re now at the stage where many sectors are close to saturation, making acquisitions even more likely in coming months.

Apparel retailers to launch major new chains for global markets
Womenswear fashion retailers like Cross Company, Pal, Baroque and Mash Style Lab are now medium-sized firms with sales as high as ¥100 billion, but all have recently announced new chains that will hopefully let them escape the confines and limits of young womenswear fashions and become genuinely big businesses. The solution is the mass market at home and global expansion, including Europe and the USA. All have come up with ideas on how to tackle both, with plans for as much as ¥1 trillion in sales.

Editorial: The coming consolidation

Retail sales surge in March
So, with the consumption tax introduced on 1 April, just how well did retailers do in March? On the whole, the situation was similar to the last increase back in 1997, but with far greater buying of high end items and, for some categories, sales increases that were as high as the month before the tax was first introduced in 1989. Supermarkets expect the consequent downturn to last no longer than April and May.

Cosmetics brands enjoy buying rush
Major cosmetics brands enjoyed large sales boosts in March as customers rushed to stock up on product before the price increase – this despite the fact that some in the industry had said to expect little impact given that ‘customers only buy when they need cosmetics’. The same executives are expecting a short sales lull, which they will offset with expanded promotional campaigns, and that the rebound will begin by July.

Seiyu preparing for more direct imports, introduces new price cuts
Seiyu is again taking a lead in the FMCG sector. Two years after shocking the industry with price cuts on basic goods, causing rivals to complain bitterly about excessive competition, the US owned chain announced more price reductions in April. In addition, it is now preparing to better leverage Walmart’s global supply system, bypassing Japanese trading houses and other routes to reduce costs and so offer even lower prices, even on some vegetables and fruits.

Middle aged women enjoying their time alone
There’s an increasing need for companies to look carefully at catering to older Japanese. There are already 16 million households over 65, of whom more than 5 million live alone. With the number of permanently single people in their 40s and 50s continuing to grow, this is a new, important segment and one that’s not going to disappear over the next two decades. But what do they want?

Used luxury goes mainstream
Used luxury goods sites might seem like a threat to sales of new luxury product at retail stores but, as with luxury cars and indeed gadgets, having an easy way to offload unwanted items often encourages further consumption, and brings new customers to brands without the budget to shop at full price. The problem has been finding an easy, trustworthy way for buyers and owners to deal. With the former head of Louis Vuitton Japan heading up one of the leading platforms, this problem looks to have been solved.

Sanyo Shokai prepares for Burberry departure in 2015
It is already widely accepted that Burberry will not renew its key Japanese apparel license with Sanyo Shokai and master license with Mitsui Bussan next year. Given that the UK brand accounts for as much as a third of Sanyo’s sales and significant royalty income for Mitsui, it will be a blow for both firms. Sanyo has had plenty of forewarning, however, and is positive it can make up the loss.

Showrooming on the rise as online sales expand
The future of retailing is in the so-called omnichannel, seamlessly linking physical stores and customer pick-up points, with the ease and low cost of selling direct online. NRI’s latest lifestyle survey run in 2012 and published recently provides further evidence for this trend. Although more people are browsing in stores to check out products before buying, increasingly the final purchase is online.

Parco forecasts 10% increase in sales
Parco now has money and it plans to spend it too. With backing from new main shareholder J Front Retailing it is sprucing up long-neglected buildings, adding new ones, and even expanding its specialty chain business again.

United Arrows launches new brands
United Arrows has big plans to double sales by 2021 and has already launched four new brands in the last few months, with more to come.

Cosmos Berry’s: Yamada Denki’s way into the senior market not so secret weapon
Yamada Denki is the dominant consumer electronics retailer with 25% of the market. The company faces pressure from declining sales due to market saturation, and has begun diversifying into new businesses as a result. But it has not given up on expanding market share yet, and already has 8,000 independent stores signed up as franchisees.

Retail Data: Department stores up 25.4% in March

News in Brief
Musashi Kosugi becomes key suburban retail hub
Japan to get largest Stradivarius store in November
Aoyama Shoji launches new chain for shopping centre market
ABC Mart launches men’s and women’s fashion footwear stores
Isetan-Mitsukoshi and Japan Post launch joint venture
Kintetsu Hoop relaunches
Sogo Chiba gets a facelift and web orders
J Front and partners confirm Matsuzakaya Ginza replacement
Low cost carriers enter the mobile phone market
Nitori to expand smartphone marketing
World launches new lifestyle chain
Amu Atsugi replaces Parco building
Harman opens first Japanese store
Department stores suffer in April
Kisarazu Mitsui Outlet Park to open expansion in July
Rakuten expands loyalty points system for retailers
Rice consumption still declining
Cheese producers take opportunity to increase prices
Seven & I, J Front, Lawson all report record profits
Hermes thanks Japan for sales increase
H2O to open in China
Joyful Honda completes IPO

Company and Brand Index this month
Numbers indicate page of report:

[column count="4"]
ABC Mart, 4-5
Abeno Harukas, 5
Active Sonar, 7
Adidas, 3-4
Aeon, 4-6, 10-11, 13, 15-16
Akachan Honpo, 3, 16
Amazon, 16
American Eagle Oufitters, 4
Amu Atsugi, 8
Aoyama Shoji, 4
Arcs, 13, 15-16
Asda, 5
Astraet, 10-11
Avec Mode, 6
Bals, 3, 16
Barneys New York, 3
Baroque Japan, 1
Belle International, 1
Bic Camera, 6
Billy’s Ent, 4
Bonica Dot, 1
Bourjois, 5
Bow & Arrows, 10
Brand Off, 7
Brandear, 7
Burberry, 1, 8
Calbee, 5
Charlotte, 4-5
Circle K Sunkus, 9
Colony 2139, 3
Cosme Kitchen, 3
Cosmos Berry, 11
Cross Company, 1, 3
Culture Convenience Club, 9
Daiei, 10, 15-16
Daikoku, 7
Daimaru-Matsuzakaya, 8
Dressterior, 7
Edion, 6, 16
Edy, 9
En Route, 10
Epoca, 8
Familymart, 13
Fancl, 4-5
Frame Limited, 1
Francfranc, 16
Freak’s Store, 5
George, 5
H2O Retailing, 11, 13
Harman, 8
Helmut Lang, 6
Hermes, 11
Hitachi, 11
Inditex Japan, 3
Isetan-Mitsukoshi, 5, 8
Ito-Yokado, 3, 5
Itochu Shoji, 13
Itoham, 5
Izumiya, 13, 16
J Front Retailing, 6, 10, 13
Jacob Coen, 9
Japan Post, 5
JBL, 8
Joyful Honda, 11
JPMitsukoshi Merchandising, 5
Jupiter Shop Channel, 15
Kai Lani, 8
Kao, 5
Kardon, 8
Kintetsu Hoop, 5
Kisarazu Mitsui Outlet Park, 8
Komehyo, 7
Kose, 4-5
Koshien SC, 3
Kukuruza Popcorn, 9
Lala Terrace, 3-4
Lawson, 6, 10, 15
Louis Vuitton Japan, 7
Loveless, 8
Lucien Pellat-Finet, 9
Lumine, 3, 17
Mac House, 8
Mackintosh Philosophy, 8
Maison Martin Margiela, 11
Manhattan Portage, 5
Mark Levinson, 8
Marubeni, 13, 15
Maruetsu, 15
Marunaka, 15
Mash Style Lab, 1, 3
Matsuzakaya Ginza, 6
Mecari, 7
Meiji, 10
MI Plaza, 8
Mila Owen, 3
Mitsubishi Shoji, 13
Mitsui Bussan, 8, 13, 15
MM12, 11
Morinaga, 10
Moussy, 1
Muji, 3, 5
Muller of Yoshiokubo, 6
Navy Store, 8
Next Blue, 4
Nike, 1, 4
Omise Parco, 10
Pal Group, 1, 3
Parco, 1, 8, 10, 13, 17
Paul Stuart, 8
Plaza, 5, 8
Pola Orbis Holding, 4
Pringle, 8
Rakuten, 9
Reclo, 7
Refco, 13
Rokko Butter, 10
Sanyo Shokai, 1, 8
Saucony, 4
Seibu, 3, 6, 8, 13
Seiyu, 1, 5, 16
Seven Eleven, 16
Shiseido, 4
Sly, 1
Snidel, 3
Sogo, 3, 6, 8, 13
Sotetsu Rozen, 15
Soup Stock Tokyo, 5
Stradivarius, 3
Sumally, 7
Sumitomo Shoji, 13
T-Point, 9
Tege United Arrows, 11
Tenmaya Store, 16
The RealReal Japan, 7
The Suit Company, 4
TicTac, 10
Tokyu, 3, 8
Toshiba, 11
Townes, 3
United Arrows, 1, 10-11
Valor, 13, 15
Vans Vault, 4
Walmart, 5
Yamada Denki, 6, 11, 16
Yukijirushi Megmilk, 10
Zerogate, 10 [/column]

JapanConsuming: Headlines April 2014

April 7, 2014

Click here to Subscribe Now All brands & companies covered in JapanConsuming this month Polarising Market: winners and losers in Japan’s leading city markets Japan is facing a major drop off in population over the next 40-60 years – and the decline has already begun. Government forecasts expect a reduction of as much as a […]

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JapanConsuming Headlines: March 2014

March 7, 2014

Click here to Subscribe Now Get ready for 20 million tourists Japan has the lowest levels of inbound tourism among advanced economies, but this is about to change thanks to lavish marketing, the growing affluence of neighbouring populations, Japan’s increasing soft power, and in 2020 the Olympics. The benefits to retailers and brands will be […]

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JapanConsuming Headlines: February 2014

February 6, 2014

Click here to Subscribe Now Focus: Consumption Tax to hit while incomes still falling Retailers are bracing themselves for consumer reaction to the increase in Consumption Tax. Retailers may be worried, but some consumers are looking at a serious change to their spending patterns if incomes don’t increase soon. Although the last rise in 1997 […]

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JapanConsuming: Headlines January 2014

January 8, 2014

Click here to Subscribe Now Focus: Specialty apparel FY2012: gaining further ground The results for specialty apparel retailing in FY2012 were even better than 2011, reflecting higher spending on premium fashions as well as a general uplift in consumer demand. The top specialty apparel retailers outperformed the market, averaging 9.1% growth and now account for […]

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JapanConsuming Headlines: December 2013

December 5, 2013

Click here to Subscribe Now Focus: Solid growth for SCs as new build rate rises again Shopping centres had a solid year in 2012 with the top 100 seeing sales rise 2.2% thanks to higher spending on fashions, food and lifestyle goods. The largest SCs are growing much quicker than the sector as a whole, […]

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