Highlights Jul-Aug 2015

Jul 15

FOCUS: Retail Industry Performance FY2014: solid results for many as distribution evolution continues

Retail results for FY2014 show just how well corporate retailing weathered the impact of the consumption tax increase in April 2014. Market share for the largest companies continues to grow, as does the percentage of sales taken up by private brands, but dynamism is also reflected in the emergence of new success stories. These are seemingly inevitable in the apparel sector, but can now also to be found in drugstores, discount retailing and local food retailing. All three formats threaten GMS chains which fared the worse in 2014 and will struggle further unless big changes are made.

World to close 500 stores in 2015
When one of Japan’s biggest apparel groups decides to close 500 stores, the impact on the industry is never going to be small. But World is not the only apparel firm to take an axe to its brand portfolio – TSI Holdings has closed 900 stores in the last three years alone. This is actually positive news from the old apparel conglomerates as they at last accept the need to focus, but there is still a long way to go before they can be said to be flourishing.

Editorial: The crisis in GMS chains

G-Foot overtakes Chiyoda, targets ABC Mart
Aeon owns G-Foot, the third largest footwear retailer, and wants it to be number two. It is likely to achieve that ambition this year. It is opening stores faster than Chiyoda, helped along by its plethora of locations in group-owned shopping malls and GMS chain. ABC Mart is not standing still, however, and continues to pull away from its peers, including adding more upmarket chains, but all this competition is providing more options for footwear brands.

GU to open 50 stores a year, increase large stores to a third of total
Fast Retailing’s number two chain is set to expand rapidly in coming years, adding 50 stores a year and increasing average store size. GU provides Fast Retailing with a new route to growth at home given saturation of the Uniqlo brand, and it also allows room to adjust positioning between the two brands, moving Uniqlo further up-market while GU takes the low end mass market position.

Walmart still hoping for acquisitions
Walmart has now owned Seiyu for almost 13 years, and has recently achieved some success. In late May, Steve Dacus stepped down as CEO after four years in charge, having overseen consecutive years of same store sales growth. There remain doubts over Seiyu’s ability to make real progress given its limited chain and lack of opportunities to acquire new capacity. This situation doesn’t look set to change soon.

Convenience store sales up 1.6% in May with innovations across sector
While GMS chains are still larger by sales volume, convenience stores continue to make the greatest progress in the FMCG sector. Last month saw a range of announcements of yet more sales growth, new private brands, and other marketing initiatives.

Dying cities need new solutions
Japan’s overall population decline is currently only visible in the outer regions, particularly in small and medium cities, but it will have a major impact on consumer brands and retailers. Two recent government white papers highlight the problem, introducing a new designation for cities expected to experience medium-term decline. Longer term the same trend will hit the major urban areas too, with Tokyo, Osaka and Nagoya all predicted to see the most rapid growth in older migrants looking for more convenient and better services.

Alpen invests in Locondo
Alpen is Japan’s biggest sports retailer and initially dismissed e-commerce as not being appropriate to its sector. Luckily it is not too proud to admit when it’s wrong. Last month it bought a stake in web retailer Locondo and relaunched its online store.

Mitsui ramps up SC investment
Mitsui Real Estate will open five major malls this year, including its first outlet mall in Hokuriku and a 90,000 sqm mega mall in Osaka. While Aeon plans to add even more new leasable space this year, Mitsui still remains the second biggest SC developer by new mall development, and continues to consolidate its SC brands through effective marketing campaigns, strong tenants and yet more entertainment.

Onwards ties with Laox and Isetan-Mitsukoshi on export brands
Like all the big apparel groups, Onward is trying to escape dependence on department stores on the one hand, and weaker sales of its European division on the other. To fix this, it is teaming up with a department store to create a new brand aimed at Western markets, and with Chinese-owned Laox to target Asian consumers.

Retail Data: Department store sales jump again

News in Brief
Tomorrowland buys Restir
Isetan-Mitsukoshi: gifts for your Facebook friends
Yamada closes 11 more stores IN JUNE
Private consumption driving retailer optimism
IKEA launches system kitchens designed for Japan
Chain stores up 5.7%, supermarkets up 7.3%
Burberry ends licenses in Japan, expands stores
Coop online sales surge 14% in 2014
Seibu Shibuya to be rebuilt from 2020
Takashimaya digitises loyalty card applications
Arcs to absorb Belle Plus and Jois
Aeon, Japan Post, Apple developing new senior shopping service
Crocs offers limited edition designer sandals
JT sells vending to Suntory
DUTY free store planned for Mitsukoshi Fukuoka
Salewa launches directly in Japan, ex-distributor signs Jack Wolfskin instead
Daiei opens first ‘Food Style Store’
United Arrows sells furniture with Nomura
LaSalle buys Sapporo SC
Footwear market increases 1% to ¥1.4 trillion

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

[columns count=”4″]ABC Mart, 4-5, 10
ACE Shoes, 5
Adastria, 14
Aeon, 2, 4, 8, 10-12, 14-16
Amazon, 9, 14
Aoyama Shoji, 14
Arcs Group, 8
Asbee, 4-5
Askul, 8, 14
At, 1-12, 14-16, 19
Beaute Prestige International, 6
Belle Plus, 8
Burberry, 3, 6
Cainz, 15
Caravan, 10
Cedar Crest, 5
Charlotte, 4
Coca Cola, 6
Convenience Culture Club, 8
Cosmos Yakuhin, 14
Crocs, 8
Daiei, 4, 10, 14
Daiso Sangyo, 14
DCM Holdings, 15
Don Quijote, 14-15
Donna Karan Japan, 3
Doto Ralse, 8
Ducas, 6
Edion, 4, 12
Edy, 8
Feminine Cafe, 4
Food Style Store, 10
Fuji, 2, 12
Geo Holdings, 14
Glico, 7
Greenbox, 4
H2O Retailing, 14
Heiwado, 2, 12
Hills Card, 10
HMV, 15
HushHush, 1
Ignio, 10
Index, 1-2, 5
Isetan, 11
Isetan-Mitsukoshi Holdings, 8
Ito-Yokado, 2, 12, 14
Itochu Technology Ventures, 9
Izumi, 2, 12
Izumiya, 14
Jack Wolfskin, 10
Japan Post, 8
Joseph, 11
Keds, 4
Lalaport, 10-11
Laox, 1, 11
LaSalle Investment Management, 11
Lawson HMV, 15
Lawson, 7-8, 12, 15-16
Le Ciel Bleu, 3
LINE, 5-6, 8, 10-11
Locospo, 9-10
Lumine, 5
Mac House, 4-5
Mackintosh London, 3
Matsumotokiyoshi, 14
Metod, 5
Ministop, 8
Mitsubishi, 8, 10
Mitsui Real Estate, 10
Mizuho Capital, 9
Mori, 10
Mr Max, 15
Nanaco, 8
Nishitetsu, 9
Nitori, 14-15
Nojima, 14
Nomura Real Estate, 11
OK Super, 14
Oki Sato, 7
Omotesando Hills, 10
Onward Holdings, 11
Origami, 11
Patrick Cox, 4
PLANT, 15
Rakuten, 9
Renown, 3
Restir Holdings, 3
Rocket Internet, 9
Roots, 7, 9
Roppongi Hills, 10
Sagawa, 8
Salewa, 10
Sanei International, 3
Sanyo Shokai, 1, 3, 6
Seibu Shibuya, 7
Seiji Ishii, 8
Seven Gold, 2, 7, 16
Seven Premium, 16
Shimamura, 16
Shiseido, 6
Shoes Paletta, 5
Sogo Seibu, 16
Starbucks, 7
Stump Town, 4
Sundrug, 14
Suntory, 9
T-Card, 8
Takashimaya, 7, 16
Takeo Kikuchi, 1
Tigora, 10
Togocho, 10
Tokyo Kutsu Ryutsu Centre, 5
Tokyo Style, 3
Tomorrowland, 3
Trenders, 3-4
Trial Company, 14-15
TSI Holdings, 1, 3
Tsuruha Holdings, 14
Unilever Japan, 6
Unimat, 9
Uniqlo, 5-6, 16
United Arrows, 11
Uny, 7-8, 12, 14, 16
Valor, 2, 12
Venus Fort, 10
Walmart, 1, 6, 14
Waon, 8
Xebio, 9, 15
Yamada Denki, 4, 12
Yamato, 8
Yaoko, 2, 12[/columns]

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