September 4 2015

September 2015 Highlights

Highlights from JapanConsuming monthly report

News and Analysis on Japanese retailing and consumers

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FOCUS: Department Stores FY2014: over the hurdle
After sales at department stores rose for the first time in 16 years in FY2013, most forecasts suggested those gains would be wiped out by the collapse in spending post-tax hike. This didn’t happen for most major stores in most big cities, even while regional stores continued their decline. The surge in tourism helped, but overall still accounts for less than 5% of turnover. The main contribution was the renewed support from affluent Japanese, thanks to their real and perceived new wealth under Abe, but, as important, customers responded to the huge amount of work done by department stores to get rid of legacy management, interiors and thinking, and meet the needs and desires ot today’s consumer.

Daimaru-Matsuzakaya starts omnichannel push with Senshukai brands in stores
Senshukai is emerging as the most dynamic of the old catalogue-based direct marketers. Like Nissen it will become the hub for the omnichannel ambitions of a major retail conglomerate – its Belle Maison and Benebis brands now feature prominently in Daimaru-Matsuzakaya stores. Senshukai is also expanding in its own right, looking to the wedding business as a major growth market.

Editorial: Retail: Innovation-led growth

Familymart gets Uny, just not yet
Familymart and Uny are set to merge, but the deal will now not be formalised until the middle of next year and the merger process has been postponed to September 2016. The main worry is the continuing slump in Uny’s profits caused by the lack of competitive strength in general merchandise retailing. The companies now say they hope to fix this before the merger takes place, although exactly how remains unclear.

Cashless vending machines: a new channel for FMCG?
With the major exception of Coca Cola, the opportunities for overseas companies to sell through Japan’s extensive and efficient vending machine channel have so far been limited. Now, not only are big drinks suppliers like Suntory and Asahi acquiring overseas drinks brands, but the level of sophistication in vending machine marketing is about to take a leap forward. The opportunities for this most idiosyncratic of food channels suddenly look that much broader.

Itochu signs KSwiss, Orobianco, Inov-8, Reyn Spooner and SoftScience
It has been another busy summer for Itochu Shoji, with several new contracts signed and handed over to trusted subsidiaries and affiliates for day to day management. There are three new footwear brands, a Hawaiian clothing retailer, and an Italian bag brand.

TSI ties with Development Bank of Japan, readies M&A fund
TSI Holdings is one of Japan’s most establishment apparel houses, with links across government and industry, providing a support network that has helped it through the tumultuous years of merger and rationalisation. These links became more transparent last month when the Development Bank of Japan acquired a stake and became its key advisor on future M&A – for which TSI now has a sizeable fund.

Wholesalers struggle with profits as retailers demand regional support
The wholesale sector remains an important part of most distribution channels, notably in food, drugs and toiletries. In others, such as electronics, wholesaling is on life-support if not actually dead, while apparel has evolved into a vertically integrated channel where single companies control all aspects of distribution, and traditional wholesale manufacturers have shifted into retailing directly. Changes in food wholesaling show the growing shift to regionalism.

Digital fashion: 3D virtual fitting and printing your own dress
Integrating new technologies into retailing is not just about e-commerce and RFID tagging to smooth inventory flow. Recent developments suggest increasing use of tracking technology and high-powered graphics chips to obviate the need to try anything on, and 3D printing combined with liquid fabric to even obviate the need for factories.

Railway firms benefit from retail, but FY2014 sales dip due to rebuilding
Investment in converting stations and surrounding areas into shopping centres and community hubs has paid serious dividends for railway operators. FY2014 saw solid growth on a like for like basis, but closure of properties for rebuilding and refurbishment, combined with some correction following the 2014 tax hike, meant a contraction in revenues for some. This is a temporary blip as stations become an ever more important location for brands, retailers and services.

Daimaru Shinsaibashi to be rebuilt
Daimaru Shinsaibashi is to be closed and completely rebuilt over a three year period. The iconic Osaka store has suffered less than some of its rivals in the face of the big increase in department store sales space since 2011, but the building is ancient by Japanese standards and increasingly unsuitable for modern retailing.

Parco to close Chiba store, but invest in Shibuya, e-commerce & Zerogate
Parco has a renewed sense of purpose, not to mention a decent budget, since being taken over by J Front Retailing. It will close its Chiba building, a good thing, and build a vast new tower in Shibuya. It will also open more Zerogate mini shop buildings in order to maximise its presence in key shopping districts, and has just acquired a stake in a web solutions business to build an e-commerce platform.

Guest Column
Impulse Mums: Japan’s fastest growing type of consumer mother

Retail Data: Department store momentum – Tokyo up 7.2%

IKEA to build chain of satellite stores
Familymart to pull out of USA
Counterworks to become Airbnb for shops
Hankyu Mens gets face lift
Softbank launches Netflix in Japan
Sogo Seibu extends private brand programme
Sanyo converts Ginza Burberry to Sanyo Tower
Uniqlo online to deliver through Seven Eleven
Mori to close Laforet Niigata
Don Quijote up 11.7% in FY2014
Matsuya to open new annex in Ginza with Agnes B flagship
Japan Post to open Kitte SC with Marui’s first Kyushu store
LINE Mall ties with Yamato
Cross Company moves into ice-cream parlours
Kuipo signs deal for Lacoste bags
Uniqlo trialling four-day work week
Isetan-Mitsukoshi to redevelop Kokubunji station site
Yamada Denki tying with department stores
More SE Asian expansion for convenience stores
Uniqlo to expand tie-up with Disney designs
Isetan-Mitsukoshi to sell secondhand jewellery
Tourism breaks all records

Companies and brands mentioned in this issue (page number included)
Abeno Hakukas, 11
Ace, 5
Acure, 4
Aeon, 3, 5, 7
Agnes B, 8
Airbnb, 4
Amazon, 5, 7-8
Apparelweb, 11
Beams, 8
Belle Maison, 1
Benebis, 1
Bershka, 11
Black Label Crestbridge, 6
Blue Label Crestbridge, 6
Burberry, 4, 6
Caraway Apparel, 6
Cath Kidston, 6
Christian Louboutin, 4
Circle K Sunkus, 3
Coca Cola, 4-5
Cosmos Berry, 10
Counterworks, 4
Creema, 4
Crocs, 5
Cross Company, 8-9
Daimaru-Matsuzakaya, 1, 14
De Longhi, 10
Dears Brain, 1
Descente, 5
Desk My Style, 17
Development Bank of Japan, 6
Disney, 11
Don Quijote, 7
Eki Marche, 10
Electroloom, 9
Etro, 4
Etsy, 4
Famima USA, 3
Famimart, 1
Fast Retailing, 6
Fukuya, 14
Hankyu-Hanshin, 14
Hankyu Mens, 4-5
IKEA Japan, 3
Inditex, 11
Inov-8, 1, 5
Isetan Salone, 16
Ito-Yokado, 3, 16
Itochu Fashion System, 5
Itochu Shoji, 5
J Brand, 6
J Front Retailing, 1, 10-11
Japan Imagination, 17
Japan Post, 8
Jean Paul Gaultier, 16
JR East, 4-5, 10
JR Takashimaya, 10, 14-15
JR Tokai, 10, 14
JR West, 4, 10, 13
Kato Sangyo, 7
Kintetsu Abeno Harukas, 14
Kitte, 8
Kowil, 5
KSwiss, 1, 5
Kuipo, 9
Lacoste, 9
Laforet, 7
Laox, 11
Lawson, 3, 11
Limited Edition, 5
LINE, 6, 8-9
Loro Piana, 4
Lucua, 10
Mackintosh London, 6
Margaret Howell, 6
Maruhiro, 14
Marui, 8, 10, 14
Marui Imai, 10
Matsuya Ginza, 8, 14
Medipal, 8
Meitetsu, 10, 13
Memomi, 9
MI Plaza, 10
Ministop, 10-11
Mitsubishi Shoji, 11
Mitsubishi Shokuhin, 7
Musubi, 1
Nano Universe, 6
Nespresso, 10
Netflix, 5
Next21, 7
Nissen, 1, 3, 16
Nitori, 3
Odakyu, 17
Orobianco, 1, 5
Paul Stuart, 6
Pearly Gates, 6
Reyn Spooner, 1, 5
Rosebud, 6
Seibu Shibuya, 6
Seven Eleven, 6-7, 11
Softbank, 5
SoftScience, 1, 5
Stussy, 6
Suica, 4
Sunspel Menswear, 6
Suntory, 4
Takashimaya, 10, 13-15
Tobu, 16
Tokyo Metro, 10
Tokyo Style, 6
Tokyu, 10, 17
TSI Holdings, 6
Uniqlo, 6-7, 9, 11
Urban Research, 9
Valor, 3
Watabe Wedding, 1
Yamada Denki, 10
Yamato Transport, 8
Zerogate, 11


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