Focus: Will Aeon cause an M&A avalanche?
Market share concentration in distribution has been growing in Japan for the past decade. Mergers and acquisitions have always been an important strategy in the sector as a means to grab more share quickly, very often at relatively low cost. Until recently, the most common reason for a distribution company to accept an approach for takeover was financial trouble or succession problems. Weaker companies still see M&A as a means to survival, but today the strong are becoming far more predatory. Most major formats are now fast approaching market saturation with little market capacity left for new, organic growth. M&A will become the single most important corporate strategy over the next five to 10 years as a result.
Mobile shopping attracts new capital
Shopping on your phone, especially for fashions, sounds like a squintingly painful process. But with larger screens, high resolutions and tap to zoom, many young Japanese now use their phone as their preferred shopping device. Investors are cock-a-hoop about the opportunities and piling in to all manner of apps from styling guides to flash sales. This means many more digital windows for retailers and brands to market their wares.
Leverage in consumer markets
Skytree: the world’s leading tourist attraction with 50 million visitors
Skytree, the radio mast and shopping centre in north east Tokyo, is not just Japan’s most popular tourist attraction, but also the most visited tourist location in the world. It plans to attract even more visitors next year.
United Arrows: double sales by 2021
United Arrows is not Japan’s largest apparel retailer, but it is currently the most prominent in terms of financial performance – a fact reflected in its stock price. Recent improvements in merchandising and market response systems have led to better customer focus and resulting improvements in sales and profits. United Arrows hopes these efficiencies will provide the bedrock to double sales to ¥220 billion by 2021.
Sazaby woos Tiger
Sazaby League delisted in 2011, promising to focus its energies on expansion rather than reporting to shareholders. It is proving true to its promise. As well as signing a host of fashion brands, it has entered negotiations with Tiger, the home accessories chain, to take on the Japan franchise. Given the chain’s momentum, this could be as significant as its coup in signing Starbucks.
Aeon: surge in SC development
Aeon plans to open as many as 20 new SCs in the next two years with a third of its existing stock of properties up for renovation and even expansion. It will further rollout new ideas geared at local markets, hoping to encourage customers to visit more regularly and stay longer. Some of these ideas are already in place in Funabashi and Tsukuba. Along with other major developers, Aeon will lead a new round of SC development over the next few years as local regional governments loosen restrictions in a desperate bid for investment.
Kansai sees foreign fashion invasion
April and May were busy months in Kansai. As well as the unveiling of Grand Front Osaka, home to a host of brands new to Kansai, major international fashion chains like H&M, Desigual and Forever 21 opened stand alone stores in the region, signalling a push to expand across Japan. Osaka is also home to the first Japanese stores for H&M’s Monki and Weekday chains.
O2O marketing made easy
O2O marketing is all the rage but while retailers find the marketing ideas easy to generate, executing them is harder given the need to engage with the geeky world of app development and coding. Not surprisingly marketing agencies are coming to the rescue with off the shelf services that can be customised with ease.
Rakuten ties with Beams to fix fashion
Rakuten continues to struggle to develop a reputation as a fashion vendor despite having the highest online apparel sales in the country. Its latest attempt is a tie up with Beams.
Edition Blue: Otsuka Kagu’s new hope for sales growth
Otsuka Kagu is Japan’s third largest furniture retailer – but it is struggling in the face of price competition from both of its larger rivals. The company is embarking on the rollout of a new select shop concept for furniture – an idea for which there might be potential in Tokyo. Meanwhile, the weakening Yen is causing havoc with Otsuka’s profits and pricing.
Zozotown to launch new business
Start Today has had a mixed year, with analysts and investors hammering it for failing to meet its forecasts, even though its growth was still above the market average. It also started and then cancelled various experiments aimed at finding new forms of growth for Zozotown. However, its latest idea is rumoured to be a completely new venture entirely.
Retail Data: Department stores: first fall in 4 months
News in Brief:
Loro Piana opens Osaka flagship, Ginza next
Saint Laurent and Balenciaga flagships in Omotesando
Non-store sales fall 1.9% in March
Circle K Sunkus Kyushu franchise switching to Lawson
Yagi Tsusho buys 76% of J&M Davidson
JIN opens 200th JINS store, uses 3D printers for prototypes
Kanematsu starts sales of NormaN Hartnell
Lacoste launches Manga collection
American Eagle to launch Japanese web store
E-Land opens 1st Spao store
Topwin Japan invests in US brands
Fast Retailing to reposition Comptoir des Cotonniers
Karuizawa SC to get 50 more stores
Francfranc aims for the US market
Seven Cafe hits 50 million cups
J Front, Takashimaya tackle direct marketing
Aeon ties with Caribbean Joe
Mitsui’s Toyosu Lalaport undergoes further renewal
Cocokara Fine acquires Kusuri no Ebina
Nissen Smileland leads in plus sizes
Tenant sales at Tama Plaza jump 2%
Fancl to split company
G-Foot introduces shoe repair service
Aeon to planning new malls in Kyoto, Matsuyama and Nagoya
Men buying in housekeeping as work hours increase
Get a concise monthly update on Japanese Consumer Markets – and a FREE copy of our monthly report.