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Key stories in this month’s issue of JapanConsuming, the essential monthly analysis and data update on Japan’s retail & consumer markets:
The zombie era ends: Renown finally goes under
Japan’s major apparel firms are in trouble as Onward’s decision to slash 50% of its stores and Sanyo Shokai’s fight with activist shareholders both demonstrate. For nearly 30 years, Renown was the worst of the bunch but it has at last been forced to file for bankruptcy protection, with wider implications for the apparel and department store sectors. And whatever the press says, it wasn’t the fault of its Chinese parent.
Editorial: A New Age of M&A
Seven Premium: private label now 22% of Seven & I’s sales
Seven Premium, Seven & I’s private brand range, continues to grow strongly. It is now the leading private brand programme in the country and provides the group with one positive outcome at the end of a difficult 12 months.
Surge in online shopping
E-commerce has surged since the start of the crisis. The biggest change in the past 12 weeks has been an increase in buying food and other essentials online, but the main barrier to online food shopping is the lack of options, so one positive result of the crisis is likely to be a sustained increase in supply.
Gift market keeps on giving
The waning importance of the formal gift market has led to a common perception that gifts are not as important as they once were. Yet both the corporate and personal gift markets continue to expand – outperforming the consumer market overall – and given their novelty and desirability, gifts are a key way for international brands to expand sales in Japan.
Adastria profits surge 79% but it may need them this year
After years of consolidation, Adastria has now begun to focus again on the consumer-facing side of its business, with the aim to integrate digital marketing and e-commerce to improve its portfolio and become one of the few genuine omnichannel fashion retailers, although there is still some way to go.
Welcia: Aeon’s profit machine
Aeon Group is Japan’s largest retail conglomerate by revenues but it struggles to make respectable profits. Now, as with Seven Eleven at Seven & I Holdings, Aeon may have found the high margin star subsidiary it has been looking for: Welcia Holdings. Welcia is the country’s leading drugstore chain and is growing strongly. Last year, it made almost as much profit as the whole of Aeon combined.
Goldwin posts record profits again
While lifestyle outdoor brands look like one of the more vulnerable categories in the current crisis, Goldwin’s renaissance continues. The sports/outdoor firm remains overly dependent on The North Face for the bulk of sales and profits but the potential to grow other brands, including its own, and a healthy balance sheet, suggest Goldwin has enough to ride out this crisis and continue to build.
Yamato struggling with demand
E-commerce package deliveries at Yamato Transport grew 13% in April as people stayed at home, but the leading couriers continue to struggle with this growth in demand. New models, new ideas and a rebalancing of the load are needed to help move the service forward in the short-term.
Isetan-Mitsukoshi losing ¥15 billion a month
Department stores are under unprecedented pressure. Most stores in Tokyo were entirely closed for April with just a few food services available in some locations. The sector was already set to reduce store numbers and this gradual trend could now become a torrent.
Shimamura to fix online channel but much more is needed
Shimamura has seen sales decline in the past few years after decades of consistent, reliable growth. It has erred and stumbled in its online strategy too but this Autumn claims it will finally deliver an online store and app that makes sense for customers – but without more fundamental restructuring of merchandise, stores and positioning, this alone won’t be enough for long-term survival.
FOCUS
Savings: Japan’s Saving Grace?
Very high savings rates are nothing new in Japan, but that propensity has strengthened significantly in the eight years since Shinzo Abe became Prime Minister. Over the past three years, following five years of very little movement, incomes finally began to rise. Despite higher wages, households have stuffed much of the increase directly into their bank accounts rather than spending. This remains a problem, but it is one that, right now, other economies might well envy. Although far from infinite, it means that households have a cash buffer which, with the right incentives, could even be unlocked as the country breaks out of the health crisis-induced recession.
Retail Data: Department Stores down 70%
IN BRIEF
H2O Retailing looks to omnichannel for recovery
Descente in the red as Korean sales fall
Summer bonuses down, but specialty retail employees do well
World to slash purchasing by 30%
Life sales surge in April, leading the food sector
Station mall sales contract
Food sales strong, while non-food slumps
Baycrews ties with Sovec to automate video marketing
Sanyo Shokai rejects US fund’s demands
Z Holdings’ e-commerce GMVs up 14%
Shopping centres down 70% in April
Locondo acquires Fashionwalker
Right-On returns to Zozotown
Daiso adds new ¥300 lines in latest acquisition
17th Bio C’Bon store to open early June
Lips launches own cosmetics brand
Qoo10: 0% commission for new merchants
GU quits South Korean market
Isetan Haus to close in Nagoya
Inbound tourists down 99.9%
Aeon expands drive through click & collect
No major price increases for essentials
Touch to Go: 90% accuracy in unmanned JR East store
Retailers and brands in this Issue
Adastria, 1, 7
Aeon, 1, 4, 8-12
Alice on Wednesday, 9
Amazon, 5, 8
Aoki, 8
Aquascutum, 1, 3
Arnold Palmer, 1, 3
Askul, 8
Avail, 13
Baycrews, 7
Bic Camera, 18
Brooks Brothers, 3
Calbee, 4
Canterbury, 9
Carrefour, 4
Closshi, 13
Cocokara Fine, 8-9
Cosmos Yakuhin, 8-9
CouCou, 9
Daimaru, 4
Daiso, 9
Descente, 3-4
Ebay, 10
Ecute, 5-6
Ellesse, 10
Fashionwalker, 8-9
Fast Retailing, 11, 13
Goldwin, 1, 7, 9-10
Gordon Brothers, 5
GU, 11, 13
Hankyu-Hanshin, 3
Hapycom, 9
Inov-8, 4
Isetan, 6, 11
Isetan-Mitsukoshi, 1, 11-12
Itochu, 3-4
Itokin, 1
Izumiya, 3
JCSA, 6
JCSC, 8
JR East, 5-6, 13
Kusuri no Aoki, 8
Laketown, 11
Laxus, 5
LINE, 7
Lips, 10
Locondo, 8-9
Lohaco, 5, 8
Lowry’s Farm, 7
Lumine, 10
Marui, 18
Matsumotokiyoshi, 8-9
Matsuya, 3
Matsuzakaya, 4
Meol, 10
Mercari, 5, 13
Mitsui, 7
Mitsukoshi, 11
Naigai, 1
Newdays, 13
Nitori, 18
Odakyu, 10
Onward, 1, 3
PayPay, 5, 8
PlusHeart, 9
Princess and Spoon, 9
Qoo10, 10
Rakuten, 5-6, 8
Renown, 1, 3
Right-On, 9
RMB, 7
Sanyo Shokai, 1, 3, 7
Seibu, 3
Shandong Ruyi, 3
Shimamura, 1, 12-13
Socola, 10
Sogo Seibu, 3
Sovec, 7
Speedo, 10
Sugi, 8-9
Suica, 13
Sundrug, 8
Takashimaya, 3, 11-12
Tesco, 4
Threepy, 9
Timeless, 3
Tobu, 3, 6, 10
Tokyu, 3, 10
Topvalu, 4, 9
Tsuruha, 8-9
Uniqlo, 7, 11, 13, 18
United Arrows, 7
Welcia, 1, 8-9
World, 5, 8-10
Yagi Tsusho, 7
Yahoo, 5, 8-9
Yamato Transport, 1, 4, 11
Yodobashi Camera, 18
Zara, 13
ZHD, 8
Zozo, 8-9, 12
Zozotown, 5, 9