Retail, Wholesale & Distribution

September 2005

August Department Store Sales Fall 0.7% On Year
Nationwide department store sales fell 0.7% on year in August to Y516.8 billion, adjusted for changes in the number of stores, the Japan Department Stores Association said Monday. It was the first fall in three months and follows preliminary figures for top Tokyo-area department stores indicating that sales fell 6.1% in August. Sales fell on year as retailers stopped offering clearance sales for spring and summer clothing, the association said. Sales also fell as some retailers scaled back their operations, the association added. A dip in personal consumption is a troubling sign for the economy, as it makes up about 55% of the nation's gross domestic product. Nationwide department store sales rose 1.1% on year in July, grew 1.4% in June, but fell 1.3% in May. Clothing, which makes up the largest proportion of department store sales, totaled Y170.50 billion in August, down 1.0% from the previous year. Sales of foodstuffs, the next-biggest component, were down 0.2% at Y137.45 billion. The association compiled its data based on a survey of 97 companies and 281 stores. Web site: http://www.depart.or.jp (Dow Jones, September 26, 2005)

Foreign Fashion Brands Making Hay
The total declared income of 45 Japanese units of famous overseas fashion brands marked a record high of 125.9 billion yen in fiscal 2004, up 3 percent from the previous year, credit research agency Teikoku Databank said Wednesday. The agency said in a report that the boom in foreign fashion brands in Japan is not transitory and that the Japanese units of those brands have developed a basis for stable earnings by opening large retail stores at prestigious downtown locations and expanding their business. LVJ Group K.K. remained the biggest earner of declared income among the units for the 12th straight year since the private credit-research agency began compiling the data in fiscal 1993. LVJ Group, which sells Louis Vuitton brand products, declared 36.4 billion yen in income for the year that ended last March, up 3.1 percent from the previous year. (The Japan Times: September, 16, 2005)

Tokyo Aug Department Store Sales Down 6.1% On Year
Toyko's department store sales in August fell 6.1% on year to Y120.8 billion, adjusted for change in the number of stores, the Japan Department Stores Association said Wednesday. The decrease follows a 1.2% rise in July, which was the first increase in three months, suggesting that growth in private consumer spending remains patchy. A slew of typhoons that hit Japan during the month hurt consumer spending, leading to the fastest pace of declines in department store sales since February. Tokyo department store sales, considered a directional indicator for nationwide sales figures, fell 1.1% in June and dropped 2.9% in May. Clothing, which makes up the highest proportion of department store sales, totaled Y38.2 billion, down 4.4% from the previous year. Sales of foodstuffs, the next largest component, were down 3.6% at Y27.0 billion. The association complied its data based on a survey of 13 companies and 27 stores. Web site: http://www.depart.or.jp (Dow Jones, September 14, 2005）

Shangri-La Hotels To Help Japan Firms Target Wealthy Chinese
Shangri-La Hotels and Resorts, a Hong Kong-based company that runs luxury hotels in Asia, will start a service to help Japanese firms target wealthy Chinese, it was learned Tuesday. The hotel operator plans to provide customer information it has accumulated through running 14 hotels in Beijing, Shanghai and other Chinese cities to Japanese firms that sell upscale bags, shoes, cosmetics and other products. It said the service will give Japanese companies a better understanding of the tastes and consumption patterns of wealthy Chinese. The hotel operator said it will obtain approval from its customers before distributing such information. Also, it said it envisions carrying out joint promotional campaigns and other events at its hotels. Shangri-La Hotels hopes that deepening its business ties with Japanese firms will help bring more visitors to its hotels and better position it for possible expansion into Japan, sources close to the matter said. (The Nihon Keizai Shimbun, September 6, 2005)

Ailing Ito-Yokado to close 30 stores
Supermarket chain Ito-Yokado Co. said Wednesday it will close about 30 unprofitable outlets by February 2009 as part of its group restructuring plan. "We are going to promote restructuring," Toshifumi Suzuki, chairman of both Ito-Yokado and affiliated convenience store chain Seven-Eleven Japan Co., said at a news conference. The announcement, made also with Denny's Japan Co., a restaurant chain affiliated with Ito-Yokado, came a day before the three set up Seven & I Holdings Co. and listed it on the Tokyo Stock Exchange. The new holding company projects 340 billion yen in group operating profit in the year to February 2009, compared with the Ito-Yokado group operating profit of 212 billion yen for the year to last February. (The Japan Times, September 1, 2005)