Parco now has money and it plans to spend it too. With backing from new main shareholder J Front Retailing it is sprucing up long-neglected buildings, adding new ones, and even expanding its specialty chain business again.
Parco published its latest three year plan last month forecasting sales will rise to ¥293 billion in FY2016, up from ¥264 billion in FY2013, a 10.8% increase. The growth will come from investment in new stores including small format developments such as the new Zerogate single tenant properties, as well as long-awaited upgrades to existing stores. It has earmarked investment of ¥37 billion for the three years, of which ¥22.8 billion will be spent on new builds and its specialty chain business.
Key developments will include expansion of Fukuoka Parco into the neighbouring Solaria Stage Building, and a ¥7.5 billion investment in a new Parco in Sendai. Due to open in Spring 2016 at the west exit of Sendai station, the Sendai SC will contain 20,000 sqm of sales space. Two new Zerogate buildings have already been announced, one in Nagoya slated to open this Autumn and another in Sapporo due in Spring 2016.
Longer-term it expects further growth from two main areas: creation of a more diverse range of formats to meet the needs of different segments in the better urban centres, and expansion overseas into China and South East Asia.
At home it sees Parco buildings as centres for incubating new design talent across all lifestyle product categories as well as services, and as hubs for communication. Concretely this means clarifying the positioning between urban stores, such as Shibuya and Fukuoka, and suburban locations like Urawa to create two distinct chains, one serving urban lifestyle and fashion consumers and the other acting as suburban community hubs offering a mix of product and services, ranging from supermarkets to clinics.
For both formats, Parco is working with tenants to eventually be able to show store inventory within the Parco webstore and allow shop staff to blog and market new product.
Parco is also reviewing its specialty chain operations such as TicTac, and is already experimenting with new formats within Parco buildings, including a fashion variety store called Once a Month in Fukuoka and Shibuya. Late last month, it also opened a store in Narita Airport called Omise Parco, its first specialty store outside a Parco building. Both the Once a Month and Omise Parco stores mix fashion and culture, selling everything from apparel to stationery. The 85 sqm Once a Month store in Fukuoka turned over ¥100 million in sales last year, encouraging Parco to look at expanding the chain outside Parco buildings. The Omise store, at just 50 sqm, offers best selling lines from the Once a Month stores and those best suited to travellers.
FOCUS: Leading shopping centres upgrade their way to 3.9% jump in sales in 2014-15
November 2015 News in Brief
Rakuten losing in online fashion
Consumer loyalty in Japan: loyalty programmes add value
Seven & I continues major overhaul of GMS and department stores
Lumine plans direct franchises with international brands and retailers
Mobile ads help reach 15 million young women
Itokin and Onward under pressure from changing market