FOCUS: Shopping centres: more space, lower sales, lower rent
While FY2007 was a good year for shopping centres (SCs), FY2008 was very challenging and presaged what has become an even tougher 2009. While sales fell for many, the rate of development has also declined after years of exuberant growth. The majority of SCs continued to work on tenant management but failed to offset the effects of slower demand, with more than half losing sales, and for the first time in three years the top 100 combined saw sales fall. Worst hit were SCs catering to the luxury brands and ageing SCs built in the 60s and 70s which have not been invested in since. Still a few managed double digit growth, but this was more about expanded floor space than more traffic.
Burberry to end Mitsui/Sanyo licence in 2015
Burberry will end its license with Mitsui and Sanyo Shokai five years early. While Burberry has not said what will replace the license arrangement, its activities here in the last seven years suggest the future will be radically different from the past.
Versace to leave Japan
Versace will close down its Japanese business in the near future but insists it is a temporary measure, with plans to come back with new shops, including a flagship store in Tokyo.
French Connection quits Japan
French Connection first entered the Japanese market with Renown as its guide, which didn’t exactly give the UK retailer the best start to its business here. There was hope last year when it bought out its beleaguered partner but the Japanese shops continued to operate at a loss. Problems at home have forced the company to cut its losses and close all its Japanese stores.
Getting your greens in Japan
Fruit and vegetable distribution and retailing remains one of the most archaic parts of Japanese consumer markets. Suddenly, however, a push-pull effect is revealing numerous and rapidly advancing changes. Aeon is branding onions no less, and Tesco Japan is selling salads that actually taste as good as they look. Will wonders never cease?
Consumption slump reveals retailer weakness
The results from Japan’s top chains show that companies that fail to keep innovating through the recession are being hit hard, with profits down almost across the board over the past six months. The case is proven by the exceptions, notably in apparel and convenience stores, where more dynamic, innovative chains continue to show new ideas which work.
BOX: Ito-Yokado to close 30 stores
Uny consummates ties to Itochu
Two years after an initial, informal business tie-up that did little more than put Itochu Shokuhin at the front of the supplier queue, Uny and Itochu Shoji have finally announced a formal equity based tie-up. This was inevitable, but it is no less significant for the time it took for the two to come together.
Pet First: Senshukai does retail
Senshukai, Japan’s leading direct mail retailer, is rapidly moving away from its roots. This doesn’t just mean shifting its catalogue business online, however, with an increasing number of bricks and mortar stores appearing under Senshukai management.
Takashimaya: selling off cross-shareholdings
Takashimaya continues to struggle with the lack of consumer confidence and lack of innovation, but still feels it needs to expand. To make up for falling cash-flow and to avoid taking on more interest bearing debt, it may even consider selling some of its cross-shareholding insurance.
Careers: Get drunk, get ahead
After work drinking has long been a staple part of the work schedule in Japan as it is in some other countries, helping to smooth inter company relations, and give the boss a semblance of a social life. But there has always been the pretence that this was somehow voluntary, a sign of the company’s great team spirit. Not at Unicharm, where drinking is obligatory.
Eleven Mitsukoshi satellites to close
Isetan Mitsukoshi announced closure of 11 very small Mitsukoshi satellite stores by March next year, prompting a rise in its share price, but also the question of why not more?
JR East focuses on retail business
JR East used to be a railway operator with a few retail services added on. Today it has both a rapidly growing e-wallet business in its Suica card, and an increasingly powerful retail arm. By 2018, the transporter of 17 million daily passengers says it wants Suica and retailing to be central to its business.
Elle Japon online store opens
Select shops are popular, as are their online versions, but web only select shops often suffer from lack of brand name pulling power. Sumitomo, the operator of Barneys New York, has launched an online store with Hachette Fujingaho which solves that problem: it is called Elle Shop.
Deflation in apparel retailing is becoming pervasive. Denims were the headline product in the last six months but now it is the turn of suits. With Seiyu offering a jacket and trousers at ¥5,000, department stores too are being forced to adjust prices on their entry level product.
Shrinking Tsutaya stores
Tsutaya dominates Japan’s movie and music rental business, with its familiar yellow and blue fascia providing home entertainment to 25% of the population. Now it hopes to do the same but from stores 90% smaller, which should do wonders for profits.
News in brief
H&M to take space in Kichijoji
Metro to expand to 25 stores
Don Quijote: ¥680 jeans trump the pack
Esola Ikebukuro to open late November
Seibu Sapporo closes
Mac House does own label with Mitsubishi
Yohji Yamamoto files for bankruptcy
Daiwa Department Store to close Niigata branches
Yano research highlights shrinking apparel market
Beams SPEAKS OZZIE
Rakuten enters Thailand
Sanei sales fall 7%, makes a loss
Roberto Cavalli store opens own store in Tokyo
Shibuya 109 adds more fashion
Korean cosmetics hit Harajuku
Nissen Winter catalogue prices down 20%
Seven Eleven to tie with Keikyu
Stylesight expands to Japan
Muji opens eight stores in October
Comme Ca Ism to Comme Ca Style
Italian weddings in Japan
Retail brands slowly building impact
Fast Retailing looking for mega merger in Europe?
Sky Tree to hit 634 metres
S&I asks for nice reviews
Heiwado adds store in China
am/pm to cut permanent staff
Joshin has strong first half
Shimachu sets high expectations
Another loss for Aeon