October 4 2009

JapanConsuming: Headlines October 2009

Highlights from JapanConsuming monthly report

News and Analysis on Japanese retailing and consumers

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Focus: Apparel: a testing year reveals the winners
Following last month’s focus on apparel distribution overall, this month we take a closer look at the most dominant apparel retail format: specialty chains. A much more mixed set of results for FY2008 reflects the difficult second half of the year facing every retailer selling apparel. Many more firms than in FY2007 saw sales fall, with a knock on effect on profits. The reduction in apparel consumption, combined with the bursting of the shopping centre bubble, did little to effect the investment in new stores. FY2009 is proving a harrowing year so far for many, but the awful results are also leading to plunging rents and enticements from landlords, encouraging rapid growth for popular stores.

How will the new government effect distribution?
Japan has a new government – not unusual except that it isn’t led by the Liberal Democratic Party for only the second time since WWII. How or even if the policies of the Democratic Party of Japan will effect distribution is still unclear, but, assuming it lasts more than a blink of an eye, some important regulatory changes affecting retailing are virtually certain.

Fast shoes
Fashion footwear retailing remains underdeveloped in Japan with few signs of innovation. Chiyoda has dominated the sector in terms of size and the last decade has seen many women’s chains go under or merge with little to replace them. At last, ABC Mart will now invest in transforming its Nuovo chain into a more significant size. Meanwhile Fast Retailing announced Uniqlo’s own “new entry” into the shoe business.

Rakuten: a global company
Rakuten is looking to consolidate its launch in Taiwan by expanding into China. At home, Japan’s largest internet business is enjoying a new wave of success based on the consumer price consciousness that the recession has brought with it.

Dog ownership increasing rapidly
Can’t wake up in the mornings? Get a dog. At least, that’s one benefit enjoyed by Japan’s new army of pet lovers, which has grown by 50% in the last 15 years, encouraging a host of new products and services.

Home Centres: high concentration
Home centres are Japan’s closest equivalent to DIY stores. With consumer interest in home design increasing, the top companies are offering trade services, and with the sector constantly modernising and evolving, there is a rapid shift to concentration at the top.

GMS chains fighting to save apparel sales
Like department stores, GMS chains have seen apparel sales slump in the past decade. Despite this, all the major companies continue to tweak the same tired old formulas, hoping that new logistics models will cover up their inability to offer competitive prices or fashion appeal. For most, it’s not working.

E-wallets: retail led cards growing fast
Everyone now has an e-wallet it seems, although around Tokyo most people have more than one. While several companies offer these electronic payment cards, the two fastest growing cards come from the biggest retailers.

Kita Kan: a new department store model
J Front will reopen the old Sogo Shinsaibashi store in November, heralding the move as a new model of department store. The three key changes are a focus on the under 30s market, almost all space being operated as tenant concessions, and simpler and more reasonable terms for these tenants. In other words the new model for department stores is fashion/station buildings.

Alpen resists recession
Japan’s biggest sports chain managed to increase sales during the last year. Much of the credit can go to the company’s successful expansion of store branded merchandise and replacement of small ageing stores with new large format outlets. While the shift to own brands is a worry for the major sports brands, both domestic and international, it is good news for the retailer. Not surprisingly, closest rival Xebio is working hard to increase its own store brand ranges.

H&M sales hit ¥8 billion, possible move into department stores
H&M continues to post strong results from its Japanese stores, averaging around ¥378,000 per sqm per month. The pace of store openings is now accelerating with three new stores last month and another opening in November. The company may even take over some space at department stores.
Box: Zara to open 2nd Shibuya store

Mango expands again
Isetan Mitsukoshi plans Kansai’s largest men’s department in 2011
Bike boom
Opening Ceremony opens Tokyo flagship, launches exclusive Japanese line
New members only fashion site
Only opens women’s suits store
Brunello Cucinelli sales up 30%
Baroque launches magazine for web sales
23,100 visit Tokyo Girls Collection
Hermes CEO says no expectations for Japan comeback
Aquascutum sold by Renown
Muji product rethink
Itochu to develop more sports and casual apparel for Fila
Most women shop online says Senshukai
Itochu signs Castelbajac second line
Point bullish on results
Amazon launches Javari designer store
Marui completes Shinjuku redevelopment
Itochu invests in China underwear
Apple ties with Idee
Sanei International closes almost 100 stores
American Apparel opens second Shibuya store
Zett quits apparel business
Premiere Vision to launch in Tokyo
Toys R Us Japan to go independent
New Aeon store in China
ABC Mart to open in Taiwan
Kanebo acquired by Hoyu
Seven & I sued
Seven Eleven to open 200 stores in China
Aeon tries to get hip
Seven & I looks overseas for own label
Quarter of Japanese women over 65
Takashimaya profits dive again


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