Isetan Mitsukoshi to close several department stores next spring.
Isetan Mitsukoshi Holdings Ltd. has decided to close several unprofitable department stores, all of which are currently run as Mitsukoshi department stores, as part of its restructuring plan, industry sources said Wednesday.
The shutdown of the department stores would be the first after Isetan Mitsukoshi was launched in April with the merger of two major department store chain operators -- Mitsukoshi Ltd. and Isetan Co.
The department stores being considered for closure by the holding company include those in the city of Kagoshima, Natori in Miyagi Prefecture and Musashimurayama in Tokyo, the sources said.
Isetan Mitsukoshi, Japan's largest department store operator in terms of sales, is expected to announce the restructuring plan after it is endorsed at a board meeting, probably by the end of this month, they said.
The move by Isetan Mitsukoshi comes at a time when its rivals are also struggling to make profits amid the economic downturn. It is likely to accelerate the closure of more department stores, particularly in the countryside, observers said.
J. Front Retailing Co., the operator of the Daimaru and Matsuzakaya department store chains, has already decided to close its department store in Imabari, Ehime Prefecture, by the end of the year.
Isetan Mitsukoshi is targeting a group operating profit of 75 billion yen in fiscal 2013 through March 31, 2014 -- an all-time high figure for the department store industry.
The holding company has decided to realign its department stores by closing some unprofitable ones to achieve the target, the sources said.
Japan's department store sales fell 3.1 percent in August from a year earlier on a same-store basis, down for the sixth straight month, according to data released last week by the Japan Department Stores Association.
A number of department stores in the countryside have remained unprofitable due partly to growing competition with large shopping malls.
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|Comment:||Isetan Mitsukoshi to close several department stores next spring.|
|Publication:||Japan Weekly Monitor|
|Date:||Sep 29, 2008|
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