Expert on Japan Retail and Consumer Markets, JapanConsuming

Michael Causton

Expert on Japan Retail and Consumer Markets

Real Insight on Japanese Consumer Markets

JapanConsuming

JapanConsuming is a specialist research firm producing intelligence on Japanese retail and consumer markets. Founded in 2000, JapanConsuming has become the leading provider of insights on Japanese retailers and consumer trends to retailers, brands, government agencies and investors. As well as a highly regarded monthly report on the market, JapanConsuming produces in-depth reports on retail sectors, seminars on key trends and telephone consulting to investors on trends and retailers.

JapanConsuming was founded by Michael Causton and Roy Larke. 

Event-Driven

<p>Direct marketing firms (the former catalogue-based vendors) have had a terrible five years in the face of competition from e-commerce, high catalogue printing costs and legacy supply chains that make product out of date even before catalogues are posted in letter boxes.</p><p>Senshukai was once the leader of the sector but is now barely half its former size and will now seek protection in the arms of JR East. There are only superficial synergies for the two firms.</p>

Direct marketing firms (the former catalogue-based vendors) have had a terrible five years in the face of competition from e-commerce, high catalogue printing costs and legacy supply chains that make product out of date even before catalogues are posted in letter boxes.Senshukai was once the leader of the sector but is now barely half its former size and will now seek protection in the arms of JR East. There are only superficial synergies for the two firms.

Thematic (Sector/Industry)

<p>Last month’s confirmation that Sogo Seibu is closing five more stores ends a terrible six months for department store chains.</p>
<p>Things started to look bad for the sector well before the lockdown as falling tourist numbers from South Korea, the impact of the consumption tax hike, and cautious consumers at home stole the gains made in the previous year.</p>
<p>A survey of 10,000 consumers earlier this year between the ages of 20 and 70 and <strong>65% replied that they rarely visited department stores, if at all.</strong> This is up from 53.4% in 2011.</p>
<p>That the sector is in trouble is well-known but the shake out will be both accelerated and intensified by the current crisis, meaning that even fewer stores will survive, leaving just 100 or so true department stores, 50% less than now.</p>
<p>The good news is that the survivors will likely thrive, particularly <a href="https://www.smartkarma.com/entities/j-front-retailing-co-ltd" target="_blank" data-smartkarma-citation="entities:8947:1" rel="noopener">J Front Retailing (3086 JP)</a> and <a href="https://www.smartkarma.com/entities/takashimaya-co-ltd" target="_blank" data-smartkarma-citation="entities:370:1" rel="noopener">Takashimaya (8233 JP)</a>. While the entire sector is currently a sell, investors looking at the long-term may see value in a few of the leading firms.</p>
<p><strong>The following is an in-depth review of the sector with the following sections:</strong></p>
<ol>
<li>Summary of key trends</li>
<li>Overview of Sales and analysis of strong and weak categories now and in the future</li>
<li>Rankings of chains and stores by category sales</li>
<li>Analysis of regional differences</li>
<li>Ranking of Top 30 firms by Sales and OPM and analysis of strong vs weak chains</li>
<li>Ranking of Top 50 stores and analysis of sales density performance</li>
<li>Review of solutions to decline and which firms will survive and thrive.</li>
</ol>
<p><em>This insight is labelled bearish because the sector will continue to decline but a small number of firms will have a sustained future and see higher growth in operating margins once the current crisis is over.</em></p>

Last month’s confirmation that Sogo Seibu is closing five more stores ends a terrible six months for department store chains.
Things started to look bad for the sector well before the lockdown as falling tourist numbers from South Korea, the impact of the consumption tax hike, and cautious consumers at home stole the gains made in the previous year.
A survey of 10,000 consumers earlier this year between the ages of 20 and 70 and 65% replied that they rarely visited department stores, if at all. This is up from 53.4% in 2011.
That the sector is in trouble is well-known but the shake out will be both accelerated and intensified by the current crisis, meaning that even fewer stores will survive, leaving just 100 or so true department stores, 50% less than now.
The good news is that the survivors will likely thrive, particularly J Front Retailing (3086 JP) and Takashimaya (8233 JP). While the entire sector is currently a sell, investors looking at the long-term may see value in a few of the leading firms.
The following is an in-depth review of the sector with the following sections:

Summary of key trends
Overview of Sales and analysis of strong and weak categories now and in the future
Rankings of chains and stores by category sales
Analysis of regional differences
Ranking of Top 30 firms by Sales and OPM and analysis of strong vs weak chains
Ranking of Top 50 stores and analysis of sales density performance
Review of solutions to decline and which firms will survive and thrive.

This insight is labelled bearish because the sector will continue to decline but a small number of firms will have a sustained future and see higher growth in operating margins once the current crisis is over.

Japan's Department Stores in 2020: The Biggest Crisis Since World War II

'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<div><p style="text-align: center;"><strong>• BEST &amp; WORST •</strong></p></div><div>
<p>The best and worst pair from yesterday's announcements is general retailer <a href="https://www.smartkarma.com/entities/izumi-co-ltd" target="_blank" data-smartkarma-citation="entities:13173:1" rel="noopener">Izumi (8273 JP) </a>and movie house <a href="https://www.smartkarma.com/entities/toho-co-ltd" target="_blank" data-smartkarma-citation="entities:7806:1" rel="noopener">Toho (9602 JP)</a>. </p>
<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/165/091/original/2020-10-14_06-31-16.png?1602624693" class="editor-image img-responsive" data-smartkarma-image-id="165091"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/165/090/original/2020-10-14_06-29-48.png?1602624602" class="editor-image img-responsive" data-smartkarma-image-id="165090"></figure><p></p></section>
</div><div><div class="content-caption">Source for all charts &amp; tables: Japan Analytics</div></div><hr><div><p style="text-align: center;"><strong>DAILY STATS</strong></p></div><hr><div><p style="text-align: center;"><strong>49 Quarterly Results</strong></p></div><div><ul style="list-style-type: disc;">
<li><p><strong>Results Score:</strong> 55% Positive / 8% Neutral / 37% Negative</p></li>
<li><p><strong>Average Results Score Change: </strong>+1.6 points</p></li>
<li><p><strong>Average % Change in Revenue:</strong> -5.6% Quarter YoY / -1.8% Rolling TTM YoY </p></li>
<li><p><strong>Average Operating Profit Margin Change:</strong> -1.8ppt</p></li>
<li><p><strong>Percentage Making Quarterly Losses:</strong> 24%</p></li>
</ul></div><hr><div><p style="text-align: center;"><strong>25 Annual • 10 Interim Forecasts/Revisions</strong></p></div><div><ul style="list-style-type: disc;">
<li><p><strong>Annual Forecast/Revision Score:</strong> 36% Positive / 0% Neutral / 64% Negative</p></li>
<li><p><strong>Interim Forecast/Revision Score Change:</strong> 50% Positive / 0% Neutral / 40% Negative</p></li>
<li><p><strong>Average Forecast/Revision Score Change:</strong> -4.1 point</p></li>
</ul></div>

• BEST &amp; WORST •
The best and worst pair from yesterday's announcements is general retailer Izumi (8273 JP) and movie house Toho (9602 JP). 

Source for all charts &amp; tables: Japan AnalyticsDAILY STATS49 Quarterly Results
Results Score: 55% Positive / 8% Neutral / 37% Negative
Average Results Score Change: +1.6 points
Average % Change in Revenue: -5.6% Quarter YoY / -1.8% Rolling TTM YoY 
Average Operating Profit Margin Change: -1.8ppt
Percentage Making Quarterly Losses: 24%
25 Annual • 10 Interim Forecasts/Revisions
Annual Forecast/Revision Score: 36% Positive / 0% Neutral / 64% Negative
Interim Forecast/Revision Score Change: 50% Positive / 0% Neutral / 40% Negative
Average Forecast/Revision Score Change: -4.1 point


🇯🇵 JAPAN • Results & Revisions 10/​​​​​​​​​​​​13 - Toho, Izumi, J Front Retailing, Koshidaka

<p style="text-align: center;"><strong>• BEST &amp; WORST •</strong></p><p style="text-align: left;">Our best and worst pair is home centre <a href="https://www.smartkarma.com/entities/keiyo-co-ltd" target="_blank" data-smartkarma-citation="entities:14415:1" rel="noopener">Keiyo (8168 JP)</a> and the department store <a href="https://www.smartkarma.com/entities/j-front-retailing-co-ltd" target="_blank" data-smartkarma-citation="entities:8947:1" rel="noopener">J Front Retailing (3086 JP)</a> although the latter is seeing an improvement in earnings momentum.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/162/606/original/2020-09-30_06-18-07.png?1601414298" class="editor-image img-responsive" data-smartkarma-image-id="162606"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/162/607/original/2020-09-29_06-15-33.png?1601414581" class="editor-image img-responsive" data-smartkarma-image-id="162607"></figure><div class="content-caption">Source fr all charts and tables: Japan Analytics</div><div>
<hr>
<p style="text-align: center;"><strong>DAILY STATS</strong></p>
</div><hr><div><p style="text-align: center;"><strong>16 Quarterly Results</strong></p></div><div><ul style="list-style-type: disc;">
<li><p><strong>Results Score:</strong> 50% Positive / 6% Neutral / 44% Negative</p></li>
<li><p><strong>Average Results Score Change:</strong> -0.9 points</p></li>
<li><p><strong>Average % Change in Revenue:</strong> -6.3% Quarter YoY / -4.2% Rolling TTM YoY </p></li>
<li><p><strong>Average Operating Profit Margin Change:</strong> -2.9ppt</p></li>
<li><p><strong>Percentage Making Quarterly Losses:</strong> 19%</p></li>
</ul></div><hr><div><p style="text-align: center;"><strong>15 Annual • 7 Interim Forecasts/Revisions</strong></p></div><div><ul style="list-style-type: disc;">
<li><p><strong>Annual Forecast/Revision Score:</strong> 33% Positive / 0% Neutral / 67% Negative</p></li>
<li><p><strong>Interim Forecast/Revision Score Change:</strong> 14% Positive / 14% Neutral / 72% Negative</p></li>
<li><p><strong>Average Forecast/Revision Score Change:</strong> -3.8 points</p></li>
</ul></div>

• BEST &amp; WORST •Our best and worst pair is home centre Keiyo (8168 JP) and the department store J Front Retailing (3086 JP) although the latter is seeing an improvement in earnings momentum.Source fr all charts and tables: Japan Analytics

DAILY STATS
16 Quarterly Results
Results Score: 50% Positive / 6% Neutral / 44% Negative
Average Results Score Change: -0.9 points
Average % Change in Revenue: -6.3% Quarter YoY / -4.2% Rolling TTM YoY 
Average Operating Profit Margin Change: -2.9ppt
Percentage Making Quarterly Losses: 19%
15 Annual • 7 Interim Forecasts/Revisions
Annual Forecast/Revision Score: 33% Positive / 0% Neutral / 67% Negative
Interim Forecast/Revision Score Change: 14% Positive / 14% Neutral / 72% Negative
Average Forecast/Revision Score Change: -3.8 points


🇯🇵 JAPAN • Results & Revisions 09/​​29 - Home Centres <> Depāto, Sugi, Mitsubishi Materials, Koito

<p>At least until the Covid-19 crisis hit Japan in January, the majority of retailers were gearing up to announce yet another really good year of financial results for FY2019-20.</p><p>Even with the crisis, results were generally better than for FY2018 – although there are big variations by sector.</p><p>Those differences are more or less what we’ve come to expect, with traditional formats like department stores continuing to struggle, while those formats that have adopted modern management are doing well.</p><p>The following is an in-depth review of Japan's retail sector, providing:</p><ul>
<li>An overview of consumer demand and retail performance</li>
<li>Format by format reviews showing growth and profit performance across all the main formats: convenience stores, supermarkets, GMS, consumer electronics, drugstores, homecentres, department stores, apparel, home and other specialty  formats.</li>
<li>Rankings: <ul>
<li>Market share and size by sector/format</li>
<li>By sales for all retailers with sales over ¥250 billion</li>
<li>By gross and operating margins, split by format and category.</li>
</ul>
</li>
</ul><p>As this is an in-depth insight, the review is split into two parts to make it easier to read.  This is Part I which provides a quick overview of all retailing. Part II, which provides snapshot reviews of each format/sector <a href="https://www.smartkarma.com/insights/japan-retail-review-2019-20-part-ii-a-sector-by-sector-review-of-winners-and-losers" target="_blank" rel="noopener">can be read here</a>.</p>

At least until the Covid-19 crisis hit Japan in January, the majority of retailers were gearing up to announce yet another really good year of financial results for FY2019-20.Even with the crisis, results were generally better than for FY2018 – although there are big variations by sector.Those differences are more or less what we’ve come to expect, with traditional formats like department stores continuing to struggle, while those formats that have adopted modern management are doing well.The following is an in-depth review of Japan's retail sector, providing:
An overview of consumer demand and retail performance
Format by format reviews showing growth and profit performance across all the main formats: convenience stores, supermarkets, GMS, consumer electronics, drugstores, homecentres, department stores, apparel, home and other specialty  formats.
Rankings: 
Market share and size by sector/format
By sales for all retailers with sales over ¥250 billion
By gross and operating margins, split by format and category.


As this is an in-depth insight, the review is split into two parts to make it easier to read.  This is Part I which provides a quick overview of all retailing. Part II, which provides snapshot reviews of each format/sector can be read here.

The Japan Retail Review: Winners and Losers in Japanese Retailing (Part I)

Japan

J. FRONT RETAILING CO., Ltd. is a holding company established through the merger of Daimaru and Matsuzakaya.  J. FRONT RETAILING operates department stores and supermarkets. The Company also manages subsidiaries which operate in wholesale businesses.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

J Front Retailing (3086 JP)

Senshukai Hopes for Rebirth with JR East

Senshukai has sought patrons before to help restructure, including J Front, but these have failed. It is trying again with JR East which is taking...

Michael Causton

Japan's Department Stores in 2020: The Biggest Crisis Since World War II

Japan's department store sector will continue to contract so it is right to be bearish on the sector. However, the clear out will allow some firms...

Michael Causton

🇯🇵 JAPAN • Results & Revisions 10/13 - Toho, Izumi, J Front Retailing, Koshidaka

The best and worst pair from yesterday's announcements is general retailer Izumi (8273 JP) and movie house Toho (9602 JP).

Campbell Gunn

🇯🇵 JAPAN • Results & Revisions 09/29 - Home Centres <> Depāto, Sugi, Mitsubishi Materials, Koito

• BEST & WORST • DAILY STATS 9 Quarterly Results Results Score: 44% Positive / 22% Neutral / 34% Negative Average Results Score...

Campbell Gunn

The Japan Retail Review: Winners and Losers in Japanese Retailing (Part I)

At least until the Covid-19 crisis hit Japan in January, the majority of retailers were gearing up to announce yet another really good year of...

Michael Causton

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Senshukai Hopes for Rebirth with JR East

Senshukai has sought patrons before to help restructure, including J Front, but these have failed. It is trying again with JR East which is taking...

Michael Causton

Japan's Department Stores in 2020: The Biggest Crisis Since World War II

Japan's department store sector will continue to contract so it is right to be bearish on the sector. However, the clear out will allow some firms...

Michael Causton

🇯🇵 JAPAN • Results & Revisions 10/​​​​​​​​​​​​13 - Toho, Izumi, J Front Retailing, Koshidaka

The best and worst pair from yesterday's announcements is general retailer Izumi (8273 JP) and movie house Toho (9602 JP).

Campbell Gunn

🇯🇵 JAPAN • Results & Revisions 09/​​29 - Home Centres <> Depāto, Sugi, Mitsubishi Materials, Koito

• BEST & WORST • DAILY STATS 9 Quarterly Results Results Score: 44% Positive / 22% Neutral / 34% Negative Average Results Score...

Campbell Gunn

The Japan Retail Review: Winners and Losers in Japanese Retailing (Part I)

At least until the Covid-19 crisis hit Japan in January, the majority of retailers were gearing up to announce yet another really good year of...

Michael Causton

🇯🇵 JAPAN • Results & Revisions 10/13 - Toho, Izumi, J Front Retailing, Koshidaka

🇯🇵 JAPAN • Results & Revisions 09/29 - Home Centres <> Depāto, Sugi, Mitsubishi Materials, Koito