September 2018 Top Stories

Sep 10

FOCUS:
Department Stores 2018: a core elite takes flight from the rest Japanese

Department stores bounced back last year, and in some regions had a party, with sales at stores in Osaka up 6.6%. Overall, of course, sales for the sector continued to contract due to closures and further conversion of space to tenancies, but this is making the format more efficient. Further efficiency is coming from real gains in retail knowhow and marketing, with some of the better chains emerging as genuine retailers for the first time, shedding their former role as real estate managers. As a result the top 50 stores, which is the core target for most international brands of apparel, accessories, food and home products, are distancing themselves from the rest both in terms of positioning and performance.

Wacoal and Descente agree partial merger to head off Itochu
Wacoal and Descente will begin a close collaboration and cross shareholding in a deal that could lead to the creation the biggest apparel wholesaler in the country. Given the lack of competing business, the deal offers plenty of synergies, but another key reason is to stave off a take over bid for Descente by Itochu, which really wants to get ahold of the sports brand’s profits.

IKEA plans small inner city format
IKEA is Japan’s number two furniture retailer but after 12 years in the market, it continues to lose ground as Nitori expands, diversifies and opens a host of new formats. IKEA will at last open a store in central Tokyo but will need to expand quickly to narrow Nitori’s lead.

Retail capital expenditure to grow massively in 2018
Major retailers are moving ahead with plans for large increases in capital expenditure in the current year. Across one survey, the average increase was 21%, but 10 retailers plan to more than double their expenditure, with both Seven & I and Aeon spending more than ¥500 billion a piece.

Donki’s magic touch
Don Quijote is a unique business, and few predicted its messy, jam-packed stores and eclectic merchandise mix would lead it to the top of the retail rankings, let alone becoming the saviour of one of Japan’s leading GMS chains. It is about to cross ¥1 trillion in sales, but could well leap ahead thanks to a 90% jump in sales at six converted Uny stores – since Uny has nearly 200 stores, if it can keep this up, it will quickly become one of the biggest retailers in the country.

World to relist to invest in retail
World has been a private company for 13 years, using this time to make significant changes to its business, including slashing many brands and more than 500 stores. It now plans to go public again, but given the tough trading conditions in the fashion market, it still needs to cut back further, begging the question just how good an investment World will be.

Walmart stays, ties with Rakuten
Rumours of Walmart’s imminent withdrawal from Japan have been flatly denied, but after 16 years or excruciatingly slow progress, the rumour is refusing to die. On the positive side, last month Seiyu took the first steps in its new tie-up with Rakuten to open what might become a major challenger to Amazon’s online food operations.

Crooz targets ¥50 billion by 2020, ¥100 billion in 5 years
Crooz’s Shop-list.com online mall has grown from nothing to ¥21 billion in just four years, selling fast fashion and a diverse range of cheap ’n’ cheerful merchandise. With a background in game development, the company has managed to claw its way to the top of a highly competitive sector, and believes it has the skills and traction to grow to ¥100 billion in five year

Mercari ¥4.4 bn loss on US woes, but passes 1 bn shipment milestone
Mercari can do no wrong in Japan, posting ever higher record sales, and with new ideas and innovations that make sense. All of this is marred by its seeming obsession with the US market. As it has for so many other retailers, the US could be Mercari’s undoing.

Oisix  up 74% on meal kit boom
It’s not easy selling food online, and the pickiness of Japanese consumers makes it doubly difficult. Now, by adapting the well-established ready-meal category into something new but beautifully simple, Japan might well have found a way to crack this particular problem: meal kits. Oisix is the meal kit king, but more retailers have realised the potential.

IN BRIEF
Itochu signs Moose Knuckles
Otsuka Kagu records third year of losses
Daimaru-Matsuzakaya to close Yamaka store
Parco to open Sannomiya Zerogate September 14
RIZAP acquires Sumitomo Brand Management import business
Convenience store sales up, while chain stores suffer
Cheese consumption up 5%, imports booming
Shimojima launches new website & app, pro packaging for Mercari vendors
Valor acquires Futabaya in Shiga
Mitsukoshi Nihonbashi to open first stage of major overhaul
Beams to open next-generation flagships in Harajuku and Roppongi
Baycrews launches online only brand
Aeon launches organic cosmetics
60% of those in their 30s and 40s buy online at least once a month
Mark IS shopping centre to open in Fukuoka in November
Yahoo and Amazon launch retail payments
Muji hotel and flagship in Ginza to open in 2019
Stripe sells Paddington Bear
Ermenegildo Zegna to open in new Marunouchi SC
Swan signs Cosby license
Natural cosmetics market jumps 6%

Brands and Companies in this Issue:
ABC Mart
Adidas
Aeon
Aeon Style
Ain Pharmaciez
Alibaba
Alipay
Amazon
Aoki
Asahi Group
Askul
Baycrews
Beams
Boice
Chiyoda
Cimarron
Converse
Coronet
Cosby
Crooz
Daiei
Daimaru-Matsuzakaya
Diptyque
Don Don Donki
Don Quijote
Dream Vision
Edifice
Edwin
Ermenegildo Zegna
F-Coop
Familymart
Feels International
Futabaya
Goldwin
Gruppo Tanaka
H2O Retailing
Hankyu-Hanshin
Heiwado
Helena Rubinstein
Hibiya Chanter
HushHush
I-ne
Illy
Index
Isetan-Mitsukoshi
Ito-Yokado
Itochu Shokuhin
Itochu Textile
Izutsuya
J Front Retailing
Java Holdings
Jeansmate
Joix
Joshin Denki
JR Tokai Takashimaya
Kiehl
Kikiyococho
Kintetsu
Kokubu
Komeri
Lakota House
Lanvin Japan
Lawson
Locondo
Lohaco
Lowya
Marronier Gate
Maruei
Marui
Matsuya
Mercari
Minnetonka
Mitsubishi Estate
Mitsui Real Estate
MoMoChi Cafe
Moose Knuckles
Muji
Nagasakiya
Nara Camicie
Nescafe
Nippon Access
Nissen
Nitori
NTT Docomo
L’Occitane
Odakyu
Oisix
Onward Holdings
L’Oreal
Otsuka Kagu
Paddington Bear
Pal Group
Parco
Picaso
Printemps Ginza
Radishboya
Rakuten
Renown
Rizap
Ryohin Keikaku
Sabon Japan
Sanyo Shokai
Seiyu
Seven Eleven
Shimamura
Shop-list
Sisley
Softbank
Start Today
Stripe International
Sumitomo Brand Management
Sustina
Takashimaya
Takeo Kikuchi
Timpan Alley
Tokyo Interior
Topvalu
Trecenti
Uniqlo
United Arrows
Uny-Familymart
Valor
Wacoal
Walmart
World
Yahoo
Yumetenbo
Zepp Fukuoka
Zerogate
Zozo

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