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Unprecedented profits for Japanese department stores

TOKYOApril 23 (News On Japan) – Amid a nationwide trend of store closures, Japan’s department store sector has posted record profits, mainly thanks to an influx of foreign tourists fueled by a favorable exchange rate.

For example, Takashimaya Group has reported its highest profits in 33 years, a success largely attributed to a surge in visitors that took advantage of the weaker yen. The group has been proactive on international social media platforms and has employed a large number of bilingual staff to cater to this growing demographic. From June, Matsuya Ginza will launch a reservation service via an app specially designed for foreign visitors.

However, the retail landscape shows great contrasts. While some flourish, others falter, leading to extreme polarization in the industry. This is highlighted by the closures of key stores such as Ichibata department store in Shimane in January, Shin-Tokorozawa Parco in Saitama in February and the upcoming closure of Gifu Takashimaya in July. In regions such as Gifu and Shimane, the number of department stores has fallen to zero, with a nationwide decline of 40% from 1999.

The increase in online shopping and the relative affordability of supermarkets contribute to the problems of physical stores. Chiaki Horan, a broadcaster, reflected on the changing perception of department stores, noting that while they were once seen as quaint destinations where you would dress up and visit, current economic realities are trending toward more affordable and accessible options such as supermarkets and online shopping .

In response to these challenges, some department stores are rebranding and reorienting their business models. For example, Tachikawa Takashimaya SC converted into a specialty store in November 2023 and introduced major supermarkets and drugstores to its premises.

Department store Kintetsu has announced plans to remove the term ‘department store’ from all its outlets except the main store, signaling a significant shift in the way these establishments define themselves in a rapidly evolving market landscape.

Source: TBS

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