Highlights June 2015

Jul 15

FOCUS: Sogo Shosha in fashion: Japanese trading companies adapt to changing fashion market
The big Japanese trading companies are key conduits in domestic apparel and fashion distribution. They supply yarn, buttons and other parts, clothing, accessories and footwear to most of the high street retailers, while also acting as distributors for hundreds of overseas brands. Their role is changing, however, as more foreign brands operate directly in Japan and more of the bigger Japanese retailers source direct from overseas. Not to be outdone, trading firms are diversifying OEM services to support the next generation of fast growing retailers, buying retailers themselves, signing yet more up and coming brands from overseas, while also buying outright those they don’t want to lose, and investing in e-commerce at home and across Asia. Their influence looks set to strengthen not weaken.

Yamato launches e-commerce solution, challenges Amazon
Yamato will launch an e-commerce package for retailers this month, leveraging its vast logistics base. The new service brings competition for Amazon and Seven & I, with rapid fulfilment to customers and backend support, while crucially helping Rakuten and other portals solve their problems with patchy merchant deliveries. Small merchants will even be able to offer same day delivery in key parts of the country.

Editorial: The power behind major brands

Isetan-Mitsukoshi to relaunch in Europe, open more stores in Japan
The amount of copy devoted to Isetan-Mitsukoshi in recent months is the result of the pace of change and innovation at the formerly dowdy department store group. As well as small stores and services like travel and health clinics, the group’s latest ideas emphasise its determination to reach out to customers wherever they are. This includes crowdfunding new projects, new stores in Europe, more stores at home and more online marketing.

Nisshinbo acquires Tokyo Shirts
Business shirts are a commodity product usually sold either within Japan’s Big 4 suits retailers or at department stores. In the last decade a few specialty chains have begun to wrest control of distribution from manufacturer wholesalers. Recognising this, one of Japan’s biggest materials businesses, Nisshinbo, sold its own shirt brand last year and has just replaced it with leading shirts retailer Tokyo Shirts, which is itself beginning to target the higher end of the market.

LGBT market finally out in the open
Japan has always been accepting of the LGBT community, although, as in the West, the more conservative avoid any public debate. A more liberal society and greater internationalisation in general mean more and more companies are openly targeting this market, which a recent report suggests has a value of close to ¥6 trillion.

Renting bags gains traction
Most women want to buy luxury bags, but there’s also the option to rent them for short periods. While this might look like bad news for bag brands since it means fewer are sold, it actually expands the market for bags designed for special occasions, times when a new purchase can’t quite be justified for the majority of consumers. A new service called Laxus even offers unlimited bag rentals all for a flat monthly subscription fee of ¥6,800 for those who prefer never to buy at all.

United Arrows: under pressure
United Arrows posted higher sales in FY2014, but it is suffering from falling profits and its core chains are experiencing declining footfall, down 10% last year on a same store basis. Management admits to problems with merchandise, but there is a growing concern that the brand is also losing its cachet after several years of experimental brand extensions and odd store locations.

H2O to invest ¥60 bn through 2017
H2O is a powerhouse in Kansai and its investment programme for the next decade looks set to confirm its dominance in key cities from Osaka down to Fukuoka in Kyushu.

Yamada Denki closes 49 stores
Yamada Denki remains one of Japan’s most aggressive and innovative retailers. It is, however, fighting a losing battle as the market around it contracts and consumers find cheaper options online. Last month it simultaneously closed 1% of its entire chain and sold a 5% share in the business to Softbank, the latter a defensive move to stave off speculative hedge funds.

H&M opens 50th store, on track to hit 120 stores by 2020
H&M is proving to be one of the fastest growing overseas apparel retailers ever in Japan. It now plans to open more small stores in city centres. Once it has worked out issues with its other chains here, these plans could make it one of the top 10 specialty apparel retailers in Japan in the next five years.

Conbini coffee hits 1.9 billion cups
Japanese consumers have fallen in love with convenience store coffee and are drinking it by the litre. This is the latest example that proves how well convenience stores understand their market and the opportunities that exist if suppliers can bring the right product to the table. No other sales channel is as powerful as convenience stores in the food sector.

Urban Research to break ¥50bn
Urban Research used to be a dyed in the wool select shop, but in the last few years it has begun to diversify into suburban SC retailing, and last year launched a new truly mass market chain called Sense of Place. It has seen sales rise from just ¥3 billion in 2001 to ¥46 billion in FY2014, up 26% on FY2013, and is projecting an increase to ¥54 billion this year.

Retail Data: Tourism surges 43%, 221% at department stores

News in Brief
The Coffee Bean & Tea Leaf opens first Japanese branch
Kadokawa becomes first publisher to work directly with Amazon
Consumer prices remain stubbornly resistant to inflation
Muji’s new CEO aims to expand in China
A new supermarket is born: USMH
@Cosme running the cosmetics floor in Yamada Denki
Tokyo Metro becomes a Lawson convenience chain franchise
New Atre annex due in Ebisu in 2016
Consumption tax to be applied to cross-border e-commerce
Uniqlo to sell yukatas globally
Uhr-Kraft watches opens by appointment store in Omotesando
Light up your legs
Otsuka Kagu announces a ¥740 million loss in 1Q2015
LINE opens flash sale site
Mitsui breaks ground on massive Hibiya redevelopment
Japan Post to open 40 tenant SC at Nagoya Station in 2016
Itochu enters e-commerce tie up with Citic
Itochu signs New Zealand womenswear brand.
Toys ‘R’ Us to open 20 Miki House corners
Yogibo bean bags come to Japan

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

[columns count=”4″]Adastria, 15
Aeon, 3, 5-6, 15
Ameba, 4
Anteprima, 15 Anthropologie, 11
Aoki, 4
Apple, 8
ASF, 15
Batoner, 3
Bear USA, 12
Best Denki, 8
Biscaye Group, 14
Blomster Sense of Place, 11 Bramhope, 15
Brick House SPA, 4 Burberry, 12
Camicia Sartoria, 4
Cariru, 6
Chanel, 6
Charlies Juices, 11
Charoen Pokphand Group, 10
Choya, 4
Chrome Hearts, 7
Citic, 10
Coach, 6
Coca-Cola, 11
Coen, 7
Coffee Bean & Tea Leaf, 3 Coronet, 11-12
Credit Saison, 7
Cyber Agent, 4
Daido, 11
Decks Tokyo Beach, 11 Dentsu, 5-6
DHC, 6
Doutor, 10
Dunhill, 12
Edion, 9
Edwin, 14
Effissimo Capital Manage- ment, 9
ES Corporation, 6 Familymart, 1, 10-11 Fast Retailing, 5, 8, 15 Fukusuke, 14
Gap Japan, 6 Georgia, 11 GinDaco, 3 Giorgio Armani, 12
Glico, 11
Green Label Relaxing, 7 Greenbar, 11
H2O Retailing, 8
Hanae Mori, 14
Hanshin Department Store, 8 Happo-en, 5
Hermes, 6
Hotland, 3
IKEA, 5
Index, 2, 4
Isetan Mirror, 3
Isetan Salone, 3
Itochu Shoji, 11-12, 15 Izumiya, 8
Japan Post, 1, 10
Java Holdings, 14
Joix, 12
JR East, 3-4, 7
JR West, 6
Jupiter TV Shopping, 15 Kadokawa, 3-4
Karen Walker, 11
Kasumi, 5
Kayac, 9
Kitte, 10
Labi Amenity, 6
Laxus, 6
Le Sportsac, 12, 14 Leilian, 14
Letibee, 5
LINE, 3, 5, 7-9, 11-12 Look, 3, 5-8, 12
Louis Vuitton, 6 Mackintosh, 14
Makuake, 4, 8
Marubeni, 5, 12
Maruetsu, 5
Maxvalu, 5
MI Plaza, 3
Miki House, 11
Mitsubishi Shoji, 11-12, 14 Mitsui Bussan, 12 Mitsukoshi Ginza, 3 Monkey Time, 7
Monki, 10
Muji, 4-5
Natural Lawson, 7 NewDays, 3
Nijiro Diversity, 6
Nisshinbo, 1, 4 Orangina, 11
Orb, 6
Orihica, 4
Otsuka Kagu, 9
Outdoor Products, 12, 15 Paul Smith, 12
Paul Stuart, 12, 14 Penfield, 12 Prada, 6
Rakuten, 1
Saha Group, 15
Seijo Ishii, 7
Sense of Place, 11 Seven Eleven, 6, 10-11 Shirts Kamakura, 4 Shop Global, 15 Starbucks, 3, 10 Subaru, 5
Sumitomo Shoji, 12, 15 Suntory, 11 Takarazuka, 6
Tatras, 14
Tiny Garden Kitchen, 11 Tohan, 4
Toho Cinemas, 10 Tokyo Metro, 6
Tokyu Plaza, 3
Toray Diplomode, 12 Toyoshima, 14
Toyota Tsusho, 12, 14 Uhr-Kraft, 8
Uniqlo, 8
United Supermarket Hold- ings, 5
Urban Research, 1, 11, 15 Valentino, 12
Webshark, 11
Yagi, 12, 14
Yagi Tsusho, 12, 14 Yahoo, 1, 3
Yamada Denki, 1, 6, 8-9 Yamato Transport, 1 Yogibo, 11
Zara, 4[/columns]

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