December 2017 Highlights

Dec 05

FOCUS: Shopping Centres 2016-17: sales stagnate as consumer slowdown bites and tenants retreat
After sales growth of 7% in 2015-16 and 4% in the previous two years, the top 100 shopping centres posted sales down a fraction in 2016-17. The top selling SCs fared worse than the sector as a whole, which rose 0.8%. The downturn in spending on apparel and other non-essentials continued from the year before, but last year was not offset by major upgrading and expansion of SCs. Outlet malls benefitted much less from tourism – although 2017-18 should see a marked improvement. Investment in new facilities continues, but other than new Aeon malls, most are small scale. Developers remain confident that proactive management and relentless marketing can overcome weak domestic demand, but much of the trade is simply shifting from nearby, older SCs rather than arising from new demand, and last year tenant closures exceeded new openings for the first time.

IY Fresh goes live
The keenly anticipated launch of IY Fresh drew massive press attention in late November, with the establishment seeing the Seven & I and Lohaco venture as the first real challenge to Amazon’s relentless progress. It is early days, but the two domestic partners are banking on the popularity of their brands and clear targeting to take on the global giant – but Amazon isn’t standing still.

Editorial: Signs of a good holiday season

Start Today forecasts ¥200 billion in sales for Zozo brand
Start Today will launch its private label brand this month, and to make sure it minimises returns has developed a high tech body fitting suit with 15,000 sensors which is already available for free via its online store. Start Today is clearly thinking big for this private label business with a target of ¥200 billion in the medium term – it also wants the brand to be the basis for a launch into overseas markets, starting with the US and Germany.

Yamato increase in wages puts more pressure on online stores
In addition to a 3% wage hike last Spring, Yamato is set to offer seasonal employees a big wage incentive over the holidays, aiming to meet the growing demand for delivery services at this busy time of year. Both drivers and warehouse workers will benefit from the increase but Yamato is likely to pass the costs on, putting pressure on e-commerce shipping prices.

Aeon plans 30 stores for Kids Republic chain by 2019
Aeon is working hard to fix its GMS business, and is seeing some success from a more specialty-style SC format called Aeon Style, but it is also keen to build its specialty chains into businesses that can trade well outside its own malls. One of the most promising is Kids Republic.

Mercari launches instant buying service for fashion consumers
Mercari is a phenomenon. Its app has been downloaded by half the Japanese population and is increasingly beloved for its convenience and cheerful cheapness, while alleviating the pressure on all those bursting one room studio wardrobes. And it continues to improve. Last month it introduced instant purchase of items and free collection. CtoC fashion trading is heading towards a significant share of the total market.

Top department stores up again in October and November
Despite some poor weather, the leading five department store companies all managed to generate higher sales in October and November, continuing a growth streak started in April boosted by stronger tourist spending and buoyant stock prices.

Loft to hit ¥100 billion this year
Loft hit a wall in 2011 and struggled for the next four years to clear mounting levels of inventory, a challenge for a business with so many SKUs. Since 2015, its fortunes have improved, helped by a Muji Passport-like app and more stores.

Locondo: ¥30 billion in sales by 2022
Locondo launched in 2011, not the most propitious year, and it took the brand until 2017 to break even. With popularity growing Locondo is now looking to double sales by 2022, with its licence of Spanish retailer Mango adding another ¥10 billion on top.

Megane Top adds new concept stores to eyewear chain
Japan has developed a competitive niche in low priced, fashionable eyewear with brands like JINS, Zoff and Own Days expanding across Asia and even entering some Western markets. At home, they are the fastest growing chains, but still not the largest. The biggest player, Megane Top, is hoping to keep its lead by emulating the newer players.

Leading apparel groups down again
Department stores have had something of a rebound since April (see page 6). This usually means that the major apparel groups like Onward also get some respite, but for perhaps the first time, this is no longer true, reflecting the increasing disconnect between these old, mainstay suppliers and their key clients. ‘Adapt or die’ has never been truer than in the case of the manufacturer-wholesalers.

Rizap: apparel industry saviour
While there has been spectacular growth for some fashion and apparel brands, recent contraction in the overall market, along with competitive pressures for legacy business models, means failure rates are increasing. While this clears space for the better performers, it also offers opportunities for turnaround specialists. In the last three years a major new player has emerged in the form of fitness gym and diet food firm, Rizap Group.

Bikes and laundry: new services at Seven Eleven and Familymart
With footfall declining and same store sales stagnating, convenience store chains are looking at more ways to lure customers into stores. This year in particular has seen a slew of new CVS developments and offshoots.

Retail Data: Tourist sales up 87% at department stores

IN BRIEF
Francfranc rolling out high end shop fits, targeting men and seniors
Wego sells 88.5% stake to investors
Yamada opens 12 ‘Sumairu’ home fashion and electronics stores in 4 months
Toiletry market up 3.3%
Radishboya offers high end fish for hot pots
Isetan-Mitsukoshi to open SC in Kokubunji in April
Seiyu offers more price reductions
Apparel bankruptcies on the up, sales down
Store vacancies increasing in Ginza
Large store applications fall for first time since June
Itochu expecting record sales for Fila
Stripe International invests in Asian fashion brands
Uniqlo to add RFID tags to all product
Senshukai opens home fashion store
Parco introduces new analytics tool for tenants
Home fashion market up 1%
Marusho Endo signs Melo Bags
Kumamoto station rebuild to include 37,000 sqm SC in 2021
Valor supermarkets struggle in 1H2017
growing demand for e-commerce fulfilment
Rakuten challenging for top spot in C2C business
Chain stores and CVS down in October

Brands & Retailers mentioned in this issue
ABC Cooking
ABC Mart
Adastria
Aeon
Aeon Style
Alpen
Amazon
Angeliebe
Aoki
Aquascutum
Arnold Palmer
Askul
Atre
Belle Maison
Bobobobo
Burberry
Cainz
Caitac Family
Chanel
Chiyoda
Crown Creative
Daimaru Matsuzakaya
Daiwa House
Daylight Design Lab
Diver City
Este Sapporo
Familymart
Fast Retailing
Forus-Vivre-OPA
Francfranc
Fril
Futako Tamagawa Rise
GEMS Ebisu
Giordano
Gourmet Studio
GU
Hacobu
Hankyu Hanshin
Huf
Intermestic
Isetan Mirror
Isetan-Mitsukoshi
Ito-Yokado
Itochu Shoji
IY Fresh
J Front
Jack
Japan Post
Jeansmate
JINS
Joinus SC
JR East
JR Kyushu
JR Tokai
JR West
Kangol
Karuizawa Prince Plaza
Kenkou Corp
Kids Republic
Komehyo
Komeri
Koseiya
Lala Garden
Lalaport
Lazona Kawasaki
Lazoviva
Locondo
Loft
Lohaco
Louis Vuitton
Lucua Osaka
Lumine
Mackintosh London
Mango
Marimura
Mark IS
Marui
Marusho Endo
Marushohotta
Matsuya
Megane Ichiba
Megane Super
Megane Top
Melo Bags
Mercari Maisonz
Mercari
MI Plaza
Miki Holdings
Misuzo
Mitsubishi Estate
Mitsubishi Estate-Simon
Mitsui Outlet Park Makuhari
Mitsui Real Estate
Movo
Muji
Naigai
Namba City
Namba Walk
NEWoMan
Nissen
Nitori
Nomura Real Estate
NTT Docomo
Oisix
Omni7
Onward Closet
Onward Holdings
OPA
Orchard Corp
Otsuka Kagu
Outdoor Product
Parco
Paris Miki
Pomelo
Radishboya
Rakuten
Renown
Rizap Group
Rosebud
Sanyo Shokai
Seibu
Seiyu-Walmart
Senshukai
Seven Eleven
Shimamura
Shop-list
Snow Brand
Sogo Seibu
Sony Innovation Fund
Sotetsu Joinus
Start Today
StretchSense
Stripe International
Stylife
Sumairu
TakaQ
Takashimaya
Teikoku Databank
The Diamond
Tohan
Tokyo Metro
Tokyu Corp
Toshin Kaihatsu
TSI Holdings
Uniqlo
United Arrows
Uny
Valor
Visionnaire Ventures
Wego
Yamada Denki
Yamato
Yamazaki Bread
Youtube
Yutembo
Zoff
Zozotown

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