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.
In April, Senshukai sold a 22.65% stake to J Front Retailing (JFR) in the first step to what will very likely become a full acquisition by the department store group. The aim is to use Senshukai’s direct marketing skills to help JFR achieve its ambitions to become an omnichannel conglomerate spanning department stores, specialty chains, shopping buildings and shopping centres.
Senshukai’s database of 15 million customers, 4 million of them active, was worth the price of the buy-in alone. Its skills in sourcing middle market, good quality, slightly aspirational clothing and interior merchandise are also key assets for JFR, and the latter’s planning teams are already being reorganised to plug in to Senshukai’s supply chains, allowing a rapid increase in new private brands for Daimaru-Matsuzakaya stores over the coming year.
Senshukai’s Belle Maison and Benebis brands are already on sale. Women’s shoe brand, Benebis, began selling around 40 SKUs from July in Daimaru-Matsuzakaya stores in Shinsaibashi, Umeda and Tokyo. Belle Maison is also being introduced for women’s and children’s apparel, including on the street level of Daimaru Umeda, and home fashion and accessories from this Autumn. Both Senshukai and Daimaru-Matsuzakaya websites are promoting the collaboration.
While working with JFR on the one hand, last month Senshukai also completed the purchase of 34% of Watabe Wedding, a leading wedding planning business. Weddings will become a “second pillar”, with Watabe working alongside Senshukai’s own Dears Brain subsidiary. Dears Brain specialises in house weddings, the fastest growing format, and complements Watabe’s strengths in resort weddings – together the two companies produced over 25,000 weddings last year.
Buying into the wedding market amid depopulation may seem strange, but as covered in JC1503, weddings remain a solid market and a significant opportunity for international brands and retailers. Senshukai’s combined wedding business will have sales of ¥57 billion, bringing it closer to market leader Take & Give Needs, which had sales of ¥59.2 billion last year. Watabe itself has seen sales fall from ¥52 billion to ¥44 billion in the last five years, but wider promotion through Senshukai should help deliver new growth and could make it the market leader in the medium term.
There are plenty of ways for Senshukai to integrate its direct marketing business with Watabe, such as through its Musubi gift catalogue, but the deal also suits its business ties with JFR. JFR will be able to promote the wedding event business through its department stores and, as Isetan plans, convert the under-utilised top floors into wedding halls.
It will also be able to tap in to the same wedding database to offer merchandise suitable for newly married couples and develop a deeper relationship with its customers at key life stages – Senshukai’s dominance in direct marketing to expectant mothers provides yet another link.
Going forward there is talk of Watabe and its network of shops being rebranded as Belle Maison, which would make a lot of sense. A business like Belle Maison Weddings is exactly the kind of lifestyle business JFR wants its group to exploit through its planned omnichannel structure. JFR’s stores and Senshukai’s sites can promote wedding services, alongside travel, while all the detailed data on the couple and family necessary for wedding planning will provide the business with plenty of chances to promote merchandise for gifts, the wedding itself, travel, setting up home, and a future family.
Senshukai ended FY2014 with sales up 0.7% to ¥142 billion, and remains reasonably profitable. This year it expects sales to rise 2.4% to ¥146 billion despite a 7% fall in 1H2015, a correction following the surge in sales prior to the consumption tax hike the year before.
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