October 6 2014

Highlights October 2014

Highlights from JapanConsuming monthly report

News and Analysis on Japanese retailing and consumers

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Apparel Retailing FY2013: the best year in 15
Apparel sales powered ahead last year, driven by consumer demand, excellent retailing and a stronger emphasis on value rather than price. With the exception of GMS stores sales rose across all formats – even at department stores. Displaying its boundless dynamism, the apparel industry once again included retailers achieving exceptional sales growth, with no fewer than four firms up more than 40% and 16 more than 10%. With little room for price competition and much of the nation replete with apparel retailing, all agree the challenge now is to improve product and marketing, and to create chains that stand out from the crowd.

RIP: Aeon to delete Daiei
Aeon will shortly make Daiei a wholly owned subsidiary and delist the company’s stock. This means that Japan’s biggest retailer from 1972 to 2000 will finally meet its end – a fate it had previously avoided thanks to government support and funding. The simultaneous confirmation that Aeon will also wipe out the Daiei brand has saddened many in the industry, but Japanese retailing has changed to the point that few will have been surprised.

Editorial: Unassailable Aeon

Aeon’s station mall model to launch in Okayama
Aeon’s SC expansion has been unprecedented in the last 10 years, so much so that new SCs pass in a blur. Aeon makes many claims for new malls, with each one presented as the latest, mould-breaking new model, but in Okayama in December Aeon will genuinely open one of its most important SCs in years. It is a model for its planned takeover of station retailing across the country, making Aeon an ever more important partner for international and domestic brands and retailers in food, fashion, and the home.

Brunello Cucinelli Japan expands
Luxury brand Brunello Cucinell is now in charge of its own distribution in Japan. Sales are up and much needed investment in upgrading department store concessions will continue this year culminating in the opening of a flagship in Ginza in Autumn 2015.

Isetan-Mitsukoshi: small store expansion continues, emphasis on clearer targets
Isetan-Mitsukoshi continues to take direct control of parts of its sales floors and expand its new network of small format, specialty retail stores. In its department stores, new sales areas are being turned into self-managed concessions and mini shopping centres in order to clarify the positioning of each branch to better suit local traffic. The latest areas include a select shop for the over 60s in Nihonbashi and a mini SC for working women in Kyushu. Meanwhile, specialty chain MI Plaza will see a significant boost to store numbers. All of this means opportunities for overseas brands.

Start Today cancels free shipping
Start Today introduced free shipping in 2012 in the face of growing competition from Amazon, which had already lured some of its key merchants like United Arrows to its mall. The service was always going to be expensive for a business that relies on the consignment model, and last month it capitulated, introducing charges again for low value shipments. Instead, however, it is offering free shipping for same day delivery around Tokyo, the first time an online store has introduced such a service.

Shosha invest in e-commerce
The rapid growth in e-commerce is leading to huge demand for state of the art distribution facilities and support. With Amazon Japan leading from the front, all the major players, and even the smaller ones, are now expected to provide short lead times at very low cost to the final customer, but few have the volume to justify their own, large DCs, creating a growing market for logistics providers. Enter the four big trading houses.

Lawson to acquire Seijo Ishii
Lawson will add its second major acquisition for the year this month, taking over leading upscale supermarket chain Seijo Ishii. It is no surprise that Mitsubishi’s convenience store subsidiary should want to add another supermarket banner to its portfolio, although Isetan-Mitsukoshi is disappointed to have been overlooked.

Working population declines by 4 million in 5 years
Depopulation in Japan often seems like old news, but the real consequences are only now beginning to be fully understood. Already medium sized cities in the outer regions, especially in the north, are being hit by population decline so rapid that there’s no longer enough money to sustain even some basic services, and it is about to get worse. Depopulation does not just mean fewer consumers, it also means higher local taxes, further reducing consumers’ capacity to spend on non-essential items. For overseas firms working in Japan it’s increasingly important to understand not only where the problem areas will be, but equally where opportunities will arise in a small number of growing municipalities.

Sazaby sells Starbucks stake
Sazaby is selling its majority stake in Starbucks, a business that transformed Sazaby’s turnover, although it still managed to retain its identity as a quirky fashion to interiors business. By selling off Starbucks Japan, it can return to its roots, but still with plenty of potential growth from chains such as Flying Tiger. It will add more overseas brands, and with its bulging coffers and record of past successes, would make a great partner.

Familymart signing more cross-retail deals
With Seven Eleven and Lawson adding around 1,000 new stores a year, and Lawson rapidly diversifying out of just convenience store retailing, number three chain Familymart is fighting to keep pace. To make up for this it is now looking at joint venture tie-ups to allow it to expand its brand and supply chain more widely. Will this be enough to keep it in the game?

Distribution industry offers full-time contracts amid staffing crisis
The distribution industry is one of the biggest employers of part-time labour, relying on flexible, low paid people to run stores and supply centres. The problem is that there are fewer and fewer people around to do these largely mundane jobs – many young people see working in restaurants as far more fun. Now companies are looking for solutions to the short-fall by offering later retirement and the chance to jump from part-time to permanent contracts.

Retail Data: Department Stores steady, down just 0.3%

News in Brief
Metrocity opens pop up store in Takashimaya
Yagi Tsusho signs Helen Kaminski and Lorena Antoniazzi
Singapore’s Croesus expands in Japan
Itochu Shoji signs Casabella
Kintetsu downgrades profit forecasts as Abeno Harukas flops
Post Office renews store concepts, move towards retailing
Uniqlo to double childrenswear sales
Ginza6 begins tenant selection
Household financial assets rise as cautious consumers save
Ikebukuro gets new SC
Duty free sales up 30% at Takashimaya and 50% at Tokyu
Ageless fashion for mothers and daughters
Sogo trials virtual fitting rooms
JR East renovates Mitaka Station SC
Bic introduces free wifi for tourists
Seiyu announces price guarantee for veggies
Import brand market up 20%
Aeon to acquire Red Cabbage
Seven & I joins with Fancl for new PB
Muji to enter India
World plans more accessory and home stores

Company and Brand Index this month
Numbers indicate page of report:

[columns count=”4″]A-Coop, 10
Abeno Harukas, 4
Adastria Holdings, 13
Aeon, 1,2, 7,8, 10,11, 13, 15
Aeon Mall, 3
Amazon Japan, 7
Aoki Holdings, 15
Athena New York Girl, 5
Atmos, 7
Atre Vie, 8
Bape Kids, 5
Beams, 5
Berluti, 6
Bic Camera, 9
Big A, 1
Brunello Cucinelli, 4
Casabella, 4
Charles & Keith, 4
Ciaopanic, 4
Circle K Sunkus, 10
Cox, 15,16
Credit Saison, 10
Croesus Retail Trust, 3
Cross Company, 3, 15,16
Dila, 9
Disney, 6
Doshisha, 4
Dunoon, 4
Egoist, 16
Espritmur, 15
F. T., 15
Familymart, 10
Familymart A-Coop, 10
Fancl, 10
Fast Retailing, 5, 11
Fendi, 6
Flying Tiger, 9
Food Maison, 3,4
Forever 21, 13
Fray I. D., 13
Freek’s Store, 4
Fukulog, 6
Gelato Pique, 13
Global Work, 15
Grameen, 11
GU, 13, 16
Hakuhodo, 7
Havaianas, 4
Helen Kaminski, 3
Hello Kitty, 6
HMV, 8
Honeys, 16
Inditex, 13
Isetan, 5, 7
Ito-Yokado, 11, 13, 15
Itochu Shoji, 4
Izumiya, 10
J Front Retailing, 6
Japan Imagination, 16
Japan Post, 5
JR East, 8
Keikyu, 15
Kintetsu Department Store, 4
Koe, 16
La-Boo, 6
Laura Ashley, 15
Lawson, 718, 10
Le Style Kids, 5
Le Style Lady, 5
Limited Edition, 8
Little Marc Jacobs, 5
Loft, 10
Lorena Antoniazzi, 3
Mac House, 16
Malie, 9
Maruetsu, 1
Marui City, 9
Maruoka Shoji, 16
Mash Holdings, 13, 15, 16
Matsuya, 15
Metrocity, 3
MI Plaza, 2, 5
Mina Perhonen, 5
Mitsui, 7
Mitsukoshi, 5, 7
Muji, 10,11, 15, 16
Mycal, 1
Niko and…, 13
Nissen, 15
OPA, 3
Orihica, 15
Pal, 16
Picard, 2, 4
Printemps Ginza, 9
Queens Isetan, 7
R. Newbold, 4
Rachel Ashwell, 9
Rakuten, 7, 15
Raquel Allegra, 9
Red Cabbage, 10
Reins International, 7
Ryohin Keikaku, 15
Salvatore Ferragamo, 2
Sazaby League, 9
Seibu, 4, 8, 10, 13
Seijo Ishii, 718
Seiyu, 9, 11, 15
Sense of Place, 15
Seven Eleven, 10, 15
Shimamura, 16
Snidel, 3, 13
Sogo, 8, 10, 13
Solaha SC, 5
Starbucks, 9
Start Today, 6, 13, 15
Stella McCartney, 5
Sterne International, 3
Studio Clip, 13, 16
T-point, 10
Taka Q, 15
Takashimaya, 2, 7, 15
Temasek Holdings, 7
Tenmaya Department Store, 3
Tod’s, 2, 3
Tokyo Midtown, 5
Tokyu Hands, 4
Toppan Printing, 8
TopValu, 15
Trinity Arts, 13, 16
Uniqlo, 5, 6, 11, 13, 15, 16
United Arrows, 3, 5, 6, 16
United Cinemas, 8
Urban Research, 4, 8, 15, 16
Wacca Ikebukuro, 7
Walmart, 1
Wear, 5, 6
World, 2, 11, 13
Yagi Tsusho, 3
Yaoko, 7
Zara, 4
Zara Home, 4
Zozotown, 6
Zozoused, 6


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