January 5 2011

JapanConsuming Headlines: January 2011

Highlights from JapanConsuming monthly report

News and Analysis on Japanese retailing and consumers

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Focus: Shopping centres: rewards but only for hard work
In FY2008 sales of the top 100 shopping centres (SCs) fell and in FY2009 were even worse. At the same time both 2009 and 2010 proved to be much quieter for shopping centre developers, producing the lowest number of new SCs since 2001. The worst performers other than those undergoing reconstruction were primarily those malls dependent on luxury goods, while conversely, the best performing SCs were those either selling luxury on the cheap, such as outlet malls, or premium mass market SCs at station hubs in the suburbs.

Gap Generation: going after Uniqlo
Gap was the first significantly successful direct investment by a foreign fashion retailer, and continues to be a solid success. Its strength has always been in its premium positioning compared to local brands, limiting its scope to the small, if profitable, top of the mass market pyramid. This may be about to change with the roll out of a cheaper, Japan exclusive, chain called The Gap Generation. Watch out Uniqlo.

American Eagle to launch in 2012
American Eagle Outfitters will open its first here in March 2012, giving Japan virtually the full set of top ranking apparel retailers. However, unlike almost all its competitors, American Eagle will not be investing directly in the market, operating instead through a franchise deal. Franchise agreements between Japanese companies and foreign apparel retailers have a poor record of success to date, but could American Eagle’s tie up with Aoyama perhaps be the exception?

Marc Jacobs debuts on TV Shopping
Marc Jacobs isn’t the first fashion brand to sell through TV Shopping channels but is probably the most significant. The first broadcast by the highly respected designer is a coup for Jupiter Shop Channel.

Marc Jacobs plans more flagships in Japan

Aeon plans Laura Ashley expansion
Laura Ashley was a popular place to shop for apparel and furnishings for a certain type of middle class woman when it launched in Japan in the late 1980s but the business has stagnated as its core customer has aged. In line with its renewed focus on making its specialty retail interests work better, Aeon plans to invest in more stores, a new format and a Japan only line.

Shibuya 109 in Osaka
Shibuya 109 continues expansion as the headquarters location struggles to maintain sales. It will open in Osaka for the first time next Spring in a major new development at Tennoji Station.

Uniqlo to send everyone overseas
Fast Retailing is set to send some 900 or so employees overseas for a minimum of 3 years each. Although this is yet another PR release from a company that pumps them out several times a day, it is an important one. This brave plan is, once again, groundbreaking stuff for a Japanese retailer and represents an essential move if the company is to achieve its high ambitions.

Kinokuniya: new ideas using old ways
Last month we highlighted the problems of Kokubu, the largest independent food wholesaler. Kinokuniya, the largest single book seller, is in a very different business as a retailer of books, but it faces much the same problem: an old retailer that grew as part of the traditional system that today is finding it hard to cope with new realities. Unfortunately, innovating its way out of trouble does not seem to be a choice it is considering.

Maruzen cuts ties with Amazon Japan

2011: two new department stores and a panda
January brings various predictions for the New Year, not least expected highlights in the coming commercial calendar. Despite signs of a general upturn with even results at the odd department store looking perky, 2011 doesn’t have all that many striking new developments. Osaka will be the centre of attention this Spring though.

Cross Company: marketing its way to the top
Cross Company is undoubtedly the hottest fashion retailer in Japan at present. It is still a relatively small outfit, but sales are set to hit ¥100 billion in a couple of years or so, well beating its own targets, and the success of some impressive new experiments in marketing recently and new brands provide lessons in how to grow rapidly in this market. It is also introducing innovative new lines.

Matsuzakaya Ginza: getting ready for something new
After years of recording annual losses of ¥1-2 billion, Matsuzakaya Ginza looks set to return to profit in the current year. Despite its location at the heart of Tokyo, the ageing store was a case study of how not to run a department store in a sector where such examples were common. No longer. The shift to using space as a shopping building rather than a department store has brought an obvious, but no less successful repositioning of the store.

Matsukiyo: losing its footing
Matsumotokiyoshi is Japan’s leading independent drugstore chain and as such is frequently in the news. It has also long been recognised as one of the more capable retailers, with a well organised supply chain and generally high performing stores. Recently, however, results have been far below par.

Murejozu: unmarried women sharing information
Young, unmarried women are increasingly independent and career orientated, even to the extent of putting jobs before families – and certainly before boyfriends. One consequence of this is a trend in partying between women of like minds and similar interests, away from men. A recent survey suggests such parties are increasingly a key forum for these important opinion leaders.

News in Brief
Tokyu department store and 160 new tenants at Futako tamagawa
Beyond Zara: Inditex to launch Bershka in Japan
Forever 21 confirms expansion
Christmas at home
Office Depot Japan to be acquired by Kakuyasu
Eddie Bauer to grow again
Ecco to add 5 stores a year
Latest Ecute opens in Ueno
Aesop opens flagship
More stores and e-commerce sales for Paul Smith
Pricey cashmere sells in downturn
Stokke buys out Matsuya
60% use social networks
Starvations up
Aeon Fantasy to take more space in stores
Henry Cottons ends Renown license
g.u. Shinsaibashi: 7,000 people a day
Coop Sapporo: when there’s no supermarket nearby
Isetan in-store promotions help shoppers
Ito-Yokado stores reverting to York Benimaru
Familymart offers cross border coupons
Outlet malls lure tourists


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