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| The Retail Industry |
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| Current State |
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| Department Stores Now a Structurally Depressed Industry |
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Principal office of Mitsukoshi, Ltd. |
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The total sales amount of the department store industry in FY2003 registered year-on-year loses for the seventh consecutive year. The long-continued slump in sales is nothing short of being symbolic of the fact that the department store industry has become one of Japan's structurally depressed industries.
In 2003, Sogo Co., Ltd. and The Seibu Department Stores, Ltd. consolidated their businesses under a holding company, resulting in the establishment of Millennium Retailing Inc. However, this does not change the fact that the Seibu Department Stores are still under the process of being rehabilitated.
There are also an increasing number of cases in which a major department store makes a move to support the rehabilitation of a struggling local department store. For example, Isetan Co., Ltd. is in the process of supporting Iwataya Department Store and Izutsuya Co., Ltd. of Fukuoka Prefecture in Kyushu. Furthermore, Mitsukoshi Ltd. is supporting Usui Department Store (Koriyama City, Fukushima Prefecture), and Takashimaya Co., Ltd. is supporting Sakurano Department Store (Sendai City, Miyagi Prefecture). |
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| In order to revive a department store, it is essential to create a distinctive characteristic that wins the support of consumers. The Men's Annex of Isetan's flagship store in Shinjuku, Tokyo, which reopened in September 2003 after going through a complete renovation, is one of the stores that have won high acclaim as a successful example of the creation of an attractive store. In the autumn of 2004, Mitsukoshi opened a new annex to its main store in Tokyo's Nihombashi in commemoration of the 100th anniversary of its founding. The company is achieving major year-on-year increases, both in terms of the number of customers attracted and in sales. Together with the outcome of the restructuring of business operations, the success or failure of such new or renovated stores also hold the key to the revival of a department store. |
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