July-August 2014 News in Brief

Jul 15

Tiffany to open stand alone in Shinjuku, Coach too

Tiffany will open a major new store in Shinjuku in October. As well as being the first new stand alone since the Roppongi store five years ago, the store also replaces the original Tiffany in Shinjuku that closed when the Mitsukoshi-operated Shinjuku Alcott was closed down – now the Uniqlo-Bic Camera store, Bicqlo. Located close by in Shinjuku Takano 2, the 300 sqm store will comprise three floors and include a bridal salon. Store design will be similar to that at the Champs-Elysee store which opened this Spring. Tiffany Japan currently operates stores in Odakyu, Takashimaya and Isetan in the Shinjuku area, among its 56 stores. Another Shinjuku 3-chome building will come on stream this October too with Coach as the key tenant. Mitsui Real Estate will complete work on Nakamuraya’s new 4,200 sqm building just across from Lumine Est – while Nakamuraya owns the building, Mitsui will manage it. 12 tenants will be installed, with Coach taking over the street and second levels with a full line store conceived by Stuart Vevers of Studio Sofield. As well as some restaurants run by Nakamuraya, other tenants will include beauty salons and fashion stores.

IKEA Japan to open 8th store

Having added the Tachikawa store in April, the closest store to central Tokyo, IKEA Japan is set to add an eighth store in Sendai in the middle of July. This rollout of 1-2 stores a year is standard pace for IKEA in any market where it has gained confidence and expects future growth. Sites in Sapporo, Nagoya and Hiroshima are also set to open over the next few years. The new openings have brought renewed attention in the Japanese press, not all of it positive with the usual commentary from some local journalists suggesting the Swedish retailer’s product quality is lower than domestic chains. The issue of IKEA’s positioning, notably its popularity among younger shoppers and the criticism it receives from older ones was also raised once again. None of this is likely to dampen the enthusiasm for the brand in Japan, however, and with consumers still having so few good value options for interior goods, IKEA is unlikely to worry too much for the foreseeable future.

Women to live over 90 on average

A new government White Paper on seniors shows that the number of people over 65 years of age hit 31.9 million in 2013, up 1.11 million in the year and accounting for 25.1% of the total population – all three figures are the highest on record. The report also revealed that life expectancy at birth was 79.94 years for men and 86.41 years for women, but for people already 60 or older, these figures jump to 84.19 and 90.93 respectively. A different survey carried out by the cabinet office found that more than half of all Japanese now want to continue working after 65, the majority for economic reasons.

GU opens in Shibuya Parco with GU Fitting service, announces 5% price increase

GU opened its first store in Shibuya last month, in the basement of Parco Part 3, targeting 109’s core customer base with a vengeance. The 360 sqm store is part of plans to up its profile among fashion consumers and is entirely given over to women’s apparel and accessories under the concept “Girls Special Shop”. GU used the store to launch a number of new services including temporary free delivery, and what it calls GU Fitting, a new idea being trialled for a few weeks at the Shibuya store. Customers who like an item they try on can register at a special counter and then walk out of the store wearing the new outfit. They can wear the item for the rest of the day and, as long as they return it before closing, won’t be charged – their own clothes are held hostage at the store. GU says it hopes the service will encourage customers to buy more GU product by letting them shop in other stores for complimentary pieces that will match the GU item, as well as compare competing brands. GU claims returned items will not be sold but used for display. Last month GU also announced it will increase prices of all A/W merchandise by 5%. GU prices range between ¥300-¥5,000. GU blames the increase  on the rising cost of imports of cotton, wool and polyester apparel due to the weak Yen and higher fabric prices.

More mega SCs planned

Aeon and Mitsui continue to lead the race to open large station malls, a new trend among major SC developers keen to exploit the growing migration into cities. Aeon plans a 70,000 sqm SC in Imabari, the second largest city in Ehime Prefecture with a population of around 180,000. The mall, slated for opening in 2016, will be part of a larger city redevelopment project which will also include a sports park. Aeon plans to make the SC a shopping destination for all of Shikoku island by including a large number of international tenants not yet present in the Shikoku market. Aeon will open another 70,000 sqm SC in Saitama in 2017 near to Ageo Station. The SC will be designed as both a shopping and leisure destination for local residents. Rival developer Mitsui Real Estate will open a new Lalaport in 2015 in Ebina in Kanagawa. This will also be a station-based SC, adjoining Ebina Station, and is part of a station redevelopment project being carried out with partners such as Odakyu and the local government. It includes three towers, commercial space and apartments. The 55,000 sqm SC will host 250 tenants with parking for 1,800 cars. This will be the third major Mitsui mall in Kanagawa, adding to Lazona Kawasaki and Lalaport Yokohama.

MAC opens new concept store

Cosmetics brand MAC opened a new store in Lalaport Tokyo Bay last month, its first in a shopping centre. Located within the Trend Square area of the mall, the new store is a trial and part of plans to increase brand awareness among young consumers and test the potential for rolling out stores within SCs across Japan. As well as selling merchandise that until now has only been available at its pro stores and online, the store offers make up lessons and will also sell ranges developed through collaborations with artists and fashion designers.


The latest American bakery chain to come to Japan is Magnolia Bakery, opening in Omotesando’s Gyre building. Magnolia Bakery is a New York-based chain specialising in cupcakes, cookies and other confectionery. The pastel-infused vintage style cafe is a franchise operated by Sweetstar, and offers both takeout and in-store seating. Cupcakes sell for up to ¥480 and customers can choose various icing decorations which are squirted on by staff as they wait. A rollout to SCs is expected once the initial teething has been completed.

Urban Research ties with The Body Shop

Urban Research released a new marketing campaign last month promoting summer dresses with a new scent developed with The Body Shop. Sold through its Urban Research Rosso chain, the scent is Body Shop’s new Fijian Water Lotus fragrance which is sold alongside make up and UR Rosso’s summer collection. Through the summer stores will display the Body Shop merchandise at the tills as well as offering customers the chance to sample the scent when trying on clothes.

Locondo ties with Base to help overseas brands into Japanese e-commerce

Locondo has formed a joint venture with Base, the easy to set up e-commerce service, in order to help sell online in Japan. Locondo, which is partly funded by overseas venture capital, will focus in particular on helping overseas brands without local distribution set up Japanese e-commerce. Base is similar to Stores.jp, allowing anyone to set up an online store with no coding experience simply by choosing a template and loading photos, text and prices into the system. Locondo will help with set up and localisation including translation, and then put its own marketing weight behind promotion of the online store. For this service it will charge 10% of sales. Its first brand is Italian footwear label Ruco Line which launched this month. Locondo plans to contract with 10 brands to start and is considering grouping them into an online mall at a later date.

Sumitomo signs with JRunway

Sumitomo Shoji has made an investment in JRunway, an apparel business specialising in promoting Japanese brands overseas, largely through e-commerce. JRunway is operated by AWCG, a Singapore-based business set up in 2011. As well as an e-commerce business, JRunway opened its first store in Singapore’s Plaza Singapura in 2012 featuring a selection of Japanese brands aimed at young women. JRunway has a deal with Singapore Post to handle fulfilment across all ASEAN countries direct from Japan. As with Rakuten’s similar deal with Singapore Post, supplier brands send stock to Singapore Post’s Japanese warehouse and from there Singapore Post handles picking and shipping – any unsold stock is easily returned. Sumitomo Shoji sees an opportunity to expand e-commerce operations outside Japan for its digital shopping business which includes TV shopping firm Jupiter Shop Channel and joint ventures such as Elle Japon. It will also help AWCG source Japanese brands and provide financing. AWCG forecasts sales of ¥15 billion within five years.

Blue Bottle Coffee comes to Japan

Oakland-based coffee chain Blue Bottle Coffee will open its first Japanese outlet this Autumn. The first store will be located in the eastern Tokyo district of Kiyosumi Shirakawa, across the river from Yaesu and close by the Museum of Modern Art. Blue Bottle Coffee is a boutique coffee store, well-regarded for its focus on single origin coffee beans and attention to detail with 12 stores in the US, and has backing from the founders of Twitter and Flickr. Its founders say they chose Japan as the first overseas market because they were themselves inspired by Japan’s craft tea making culture. The chain’s local management say they will avoid high traffic areas like Shibuya and Roppongi, preferring to focus on locations which attract like-minded customers who appreciate its attention to detail, slower pace and quality coffee. There are also plans for an online shop selling coffee and branded accessories.

H2O Retailing up 10% in 2013

H2O Retailing saw sales rise 9.8% to ¥577 billion in FY2013 on the back of the re-opening of Hankyu Umeda department store and strong sales overall in its department stores – department store sales alone rose 11.5%. Operating profit rose a healthy 62.3% to ¥17.3 billion. Hankyu Umeda’s sales rose 32.8% overall to ¥192.2 billion (including Hankyu Mens Osaka). The only blackmark was Hanshin Department Store where sales fell 7.6% due to competition from Grand Front Osaka and Hankyu Umeda itself. For the year ahead, the group is forecasting sales of ¥810 billion due to the merger with Izumiya which completed last month.

Nomura Real Estate plans neighbourhood SC development

Leading property developer Nomura Real Estate plans to start developing neighbourhood SCs, diversifying beyond its core business of small city SCs and office space. It sees a major opportunity in inner suburb residential neighbourhoods in particular with SCs mixing shopping, dining and entertainment. Nomura prioritised SC development as a key pillar for growth in its latest medium term plan, expecting to acquire at least four sites per year in the next few years. In April Nomura acquired two city SCs – GEMS Ichigaya and GEMS Shibadaimon with plans to create a chain of GEMS mini SCs around the capital and then in other major cities.

Amazon Japan launches designer’s baby store

Amazon Japan has launched a new section offering a chance for international brands of babywear to access the Japanese market. Called Sekai no Baby, the store offers more than 50 brands of babywear from around the world and 2,000 SKUs. Brands include Maxomarra, Circo, Babylegs and Jamie Rae as well as major labels such as Carter’s and Ralph Lauren. Prices reach as high as ¥20,000 for an all-in-one down sleeping bag from Yporque. The store’s numerous unique offerings, not seen in other stores in Japan, should appeal to many new mothers and grandmothers.

Seibu Ikebukuro to refurbish street and basement levels

Seven & I will invest ¥6 billion in refurbishing the street and basement levels of its flagship Seibu Ikebukuro store over the next two years. Part of a much larger renovation of Ikebukuro station by JR East, the updated area at Seibu will comprise around 5,000 sqm and will focus on women customers in their 20s and 30s. Stone flooring and large specialty tenancies will be introduced, as well as gift, confectionery and deli food areas.

Kohnan Shoji ordered to stop sale of unapproved ELECTRONICS

Major home centre chain, Kohnan Shoji, has been ordered to stop the sale of 950 in-house developed products that were incorrectly labelled as meeting Japanese safety standards. This is the first case of a retailer being charged under a 2001 law that requires correct use of Japanese safety standard labelling. The products in question were from among 1,418 SKUs including light bulbs, fans, microwaves, refrigerators and other electrical goods made mostly in China and Taiwan. The products carried the PSE Mark signifying official clearance of the Product Safety: Electrical standards when in fact they had never been properly inspected. Inspections can now take place, but each SKU is banned from sale for between one and three months on an item-by-item basis. Of more than 1,600 items Kohnan has directly imported over the past 13 years since the law was enforced, 90% were never inspected. The chain has already sold a reported 10 million items from the range during this period.

Tokyu to build new SC in Shibuya

Tokyu and partners have unveiled plans for a major new commercial complex at the Sakuragaoka exit of Shibuya station to be completed in 2020. The 240,000 sqm 33 story complex will include apartments, offices, entertainment zones, and shopping. A series of decks will face out to Route 246 and allow easier access between Sakuragaoka and Shibuya station. The development is just one of four major developments planned around Shibuya station in coming years.

Forever 21 in Nagoya

Forever 21 opened a store in Aeon’s latest megamall, Aeon Nagoya Chaya late last month. The 1,200 store is Forever 21’s first in the Chubu region. Other fashion stores among the 200 tenants at the new mall include H&M, Old Navy, Heart Market and Charles & Keith.

United Arrows reports good start to Bow & Arrows

United Arrows launched a new department store focused brand in April called Bow & Arrows, opening the first two stores in Daimaru Umeda and Daimaru Sapporo. Another brand, Darjeeling Days, was introduced for the department store market back in 2005, as a high margin select shop with corners around 400 sqm, but was later shut down. Bow & Arrows is much more tightly focused, operating in just 100 sqm but offering both formal and casual lines, and a range of accessories, with 95% of items exclusive to the brand. Early reports suggest high end casualwear and accessories are leading sales, with ¥30,000-40,000 jackets popular, while older customers are buying suits in the ¥80,000 and above range. As well as a standard range, the brand offers larger items two sizes bigger than in other United Arrows’ stores. The company says things have gone well at the two initial stores and it now plans to replicate the concept in Tokyo.

Takashimaya begins home delivery of fresh foods

In late June, venerable department store Takashimaya launched a new venture delivering fresh foods, including fish and meat, direct to customers. The new service is available in Tokyo and the three surrounding prefectures of Kanagawa, Chiba and Saitama, through a new subsidiary operation called Takashimaya Rose Kitchen. The range includes 550 SKUs on sale in Takashimaya’s Kanto stores, and Takashimaya is forecasting first year sales in the region of ¥600 million. The operation is basically a high end net super that runs independently of Takashimaya’s online store. The company is hoping to attract older consumers, particularly those loyal to its brand, with some of the highest quality fresh produce available online in the capital. The service charges ¥540 per delivery and customers can choose a specific day and have deliveries arrive within a selected two hour window.

Retail sales holding steady

Overall retail sales in May were down 0.4% to around ¥11.434 trillion, far better than some forecasts which had expected sales to fall around 2%. The decline is also a considerable improvement on the 4.3% drop in April, although some categories, notably cars and electronics remain much weaker. The results were helped by warmer, dry weather in May and an extra weekend. Two categories, apparel and accessories, both saw sales improve compared to 2013 as shoppers began buying early for summer. In food, sales of fresh meat were also up compared to last year. Department stores were down 2.7%, much improved on April when sales were down in double digits. Supermarkets were actually up by 0.5%, while convenience stores jumped 6.4% compared to 2013 due to the increased numbers of stores.

Beisia moving into drugstores

Beisia has launched a completely new venture in the drugstore sector. The company has operated a trial store in Sano in Gunma since last year, but will begin rollout of a new chain this month with a new store in Saitama and plans for 30 stores by the year end. The store operates under the new Beisia Mart banner and offers around 1,500 sqm of sales space with some 20,000 SKUs. The range includes medicines through to household cleaning products and cosmetics, but about 50% of the total is packaged foods and confectionary.