December 2003

Focus: In Japan, competitors are the best of partners
Despite the initial efforts of General MacArthur, Japan has never really moved away from a business custom of cooperative competition. Cross shareholding and inter-competitor exchanges are the norm and, likely, always will be. For much of the past 50 years, retailing has remained largely dominated by manufacturers and big wholesalers, but as the industry is now changing very rapidly indeed, this dominance is quickly being broken down. It is not, however, being replaced by new independence, but rather the dominance and control of new channel leaders, namely the largest retailers and, most importantly, the five largest trading houses.

Apple: haute couture computers
Tokyo was the obvious choice for Apple’s first directly operated store outside the US, and Japanese from all over the country and even overseas flocked to see it open on 30 November. Computers are not the usual JC topic, but Apple is as much a design brand as a computer firm. Managed right, Apple is set to become the computer equivalent of Louis Vuitton in Japan, and there’s no reason why it shouldn’t.

Mini skirts on the rise
As reported recently in JC, boots are back and swelling the coffers of department stores across the country with their higher prices and margins. A key coordinate for fashion conscious consumers is once again the mini skirt.

Japan's coming internet boom
Japan’s love affair with mobile phones has brought its own style of success and new markets, but it has also held back the spread of PC based internet connections and e-commerce. This is about to change.

Battle of the E-Malls: Rakuten vs. Yahoo! Japan
Yahoo has established itself in Japan and is now looking to take on the most successful of all domestic Internet businesses, Rakuten. Yahoo has a long way to go to catch up, but its huge user base of broadband subscribers should push it forward very quickly indeed.

Import brand website launch
A new shopping site selling upscale international fashion brands was launched late last month. Could it achieve what others haven't? So far the signs are good.

Takashimaya spins off underperforming stores
Most department stores have been consolidating and centralizing operations over recent years, but in a major cost cutting move, Takashimaya has announced that it will reverse the trend and actually spin off regional stores, allowing them to fend largely for themselves.

Daiei positive on food
Daiei continues to be Japanese retailing’s biggest problem, but the company is at last trying to be positive. For the first time in six years, the chain will finish the year with more stores than it started, and the company is adding new ideas both to its formatting and its brands. Minor changes, but better than nothing.

Overseas travel down nearly 40%, domestic resorts up
Travel overseas declined drastically over the first six months of the year. While travel purchasing is improving this half, it remains low. The impact on market share of the traditional group tour operators is proving significant.

Aeon and Posful: inevitability
Aeon has taken a controlling stake in Hokkaido's leading food retailer, Posful. Many had hoped it might be the only part of defunct Mycal not to fall into Aeon's hands. It was not to be. Aeon has effectively acquired the Mycal Group, Japan's fourth largest retailer at the time of its bankruptcy. The dominance of the Aeon empire is now official.

Cheap and plentiful
Japan's excellent set of official retail statistics has again been updated with the publication of the first half of the five year National Pricing Survey. The result is clear. Discounting has arrived and welcomed, particularly in Kansai.

Non-store retailing as hot as ever
Non-store retailing still looks very good indeed. A few of the more traditional companies remain depressed despite annual optimistic forecasts, but newer companies in the internet and TV shopping sectors are showing that the sector as a whole remains buoyant.

Mitsui takes full control of Sanyu
Mitsui is the last of the big trading houses to enter the consumer market for foods. It is now planning an increase in wholesale operations, but a move directly into retailing looks increasingly on the cards.

Honey's up 53%, JASDAQ listing
Honey's may be a little known women's wear retailer from Fukushima prefecture but it was one of the best-performing retailers last year (see last month's focus) and is showing effortless growth this year too. A JASDAQ listing in December will swing the spotlight in its direction.

Itochu signs yet more brands
The last six months has seen Itochu Shoji sign more than 10 overseas brands. In the last few weeks alone it has signed another batch. Although Itochu only operates a few brand businesses directly, it does have a vast portfolio. How does it keep track?

Muji climbs back
Ryohin Keikaku's president, Tadamitsu Matsui, claims Muji will become a ¥200 billion company within seven to eight years, up from ¥115 billion today. Given sales dipped 4% last year from ¥119 billion, this is a bold claim but it is possible.

News in Brief:
D'Urban To Halve Number Of Clothing Brands, add European licenses
Mitsui outlets consolidate
Coach expects further growth
United Arrows up 25%
Nana becomes a fashion brand
Jean-Paul Gaultier Japan
Isetan expects ¥10 billion loss
Hussein Chalayan to open in Daikanyama
Parco follows department store luxury brand appeal
Pringle in Ginza
Zegna opens Zegna
Kintetsu to sell non-core units
L'Oreal to take majority stake in Shu Uemura
K's Denki acquires Gigas Viva
Marui's second Kansai store
Belluna interim sales up 5.5%
Miss Sixty to launch men's line
Undici Nove signs Charles Jourdan
Land's End affair with men
Lacoste opens in Kansai
Lawson bans synthetic food additives
Benetton to enter the school uniform market
Sogo going strong in the rest of Asia
Starbucks profit fall
Recycling at department stores
C&S to merge Circle K and Sunkus
Daiki to enter Kyushu
Aeon gets into ticket services
Matsukiyo entering Gifu, Oita
Fukuoka keeps its Hawks