Highlights September 2014

Sep 06

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:
[columns count=”4″]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
IKEA, 8
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
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