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. 

Thematic (Sector/Industry)

<ul>
<li>Department stores managed a partial rebound in 2021-22 but remain around 19% behind pre-Covid levels overall. As a result, profits remain elusive and the shake up in the industry continues. </li>
<li>On the plus side, luxury sales continue to surge and management is now more engaged than for years.</li>
<li>Although we remain negative on the sector overall, some companies will bounce back strongly as detailed in this in-depth review of the sector.</li>
</ul>


Department stores managed a partial rebound in 2021-22 but remain around 19% behind pre-Covid levels overall. As a result, profits remain elusive and the shake up in the industry continues. 
On the plus side, luxury sales continue to surge and management is now more engaged than for years.
Although we remain negative on the sector overall, some companies will bounce back strongly as detailed in this in-depth review of the sector.


Japan Department Stores: Sales Recovery but the Real Opportunity Is in Margin Growth

Equity Bottom-Up

Isetan Mitsukoshi Holdings Ltd / Equity Bottom-Up

<ul>
<li>Isetan-Mitsukoshi is dangerously dependent on a small number of wealthy customers for a lot of its revenue.</li>
<li>Wealthy VIP customers account for around half of sales at both Isetan Shinjuku and Mitsukoshi Nihonbashi department stores</li>
<li>But the wealth market is one of the few segments to continue to grow so should be a source of growth even while the rest of its market shrinks.</li>
</ul>


Isetan-Mitsukoshi is dangerously dependent on a small number of wealthy customers for a lot of its revenue.
Wealthy VIP customers account for around half of sales at both Isetan Shinjuku and Mitsukoshi Nihonbashi department stores
But the wealth market is one of the few segments to continue to grow so should be a source of growth even while the rest of its market shrinks.


50% of Sales at Isetan-Mitsukoshi Flagships from Top 5% of Customers

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>The bear market rally that we were on watch for started last week, confirmed by the bullish reversals on the DAX, Hang Seng, MSCI China (MCHI-US), and China Internet (KWEB-US).</li>
<li>Is this just another bear market rally, or will indexes are able to make a higher low and start a new bull market? Either way, it's a start.</li>
<li>We highlight attractive stocks from a bottoms-up perspective, spanning several Sectors. Over half hail from Japan, where the TOPIX Small index is reversing its downtrend.</li>
</ul>


The bear market rally that we were on watch for started last week, confirmed by the bullish reversals on the DAX, Hang Seng, MSCI China (MCHI-US), and China Internet (KWEB-US).
Is this just another bear market rally, or will indexes are able to make a higher low and start a new bull market? Either way, it's a start.
We highlight attractive stocks from a bottoms-up perspective, spanning several Sectors. Over half hail from Japan, where the TOPIX Small index is reversing its downtrend.


Cautiously Optimistic Following Downtrend Reversals; Japan Continues to Lead; Bottoms-Up Stock Rec's

Japan Specialist

Mark Chadwick

<ul>
<li>J-Front Retailing, a Japanese department store operator, will announce full-year results on April 11.</li>
<li>We expect FY2/23 guidance to be more optimistic as Japan normalises post COVID. </li>
<li>Pent up demand for luxury goods to drive recovery of department stores. J-Front is still trading below book value.</li>
</ul>


J-Front Retailing, a Japanese department store operator, will announce full-year results on April 11.
We expect FY2/23 guidance to be more optimistic as Japan normalises post COVID. 
Pent up demand for luxury goods to drive recovery of department stores. J-Front is still trading below book value.


J-Front (3086) | Recent Datapoints Point to High-End Shoppers Loosening the Purse Strings

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

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.

Event-Driven

<ul>
<li>Nikkei reported yesterday that <a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I Holdings (3382 JP)</a> is in final negotiations to sell its underperforming department store business Sogo Seibu, amidst pressure from several of its investors.</li>
<li>The company has indirectly confirmed the news by saying that they are considering changes to Seven &amp; I’s business portfolio including the sale of the Sogo &amp; Seibu business.</li>
<li>The disposal of underperforming department stores could increase the efficiency of capital usage and generate upside to shareholders returns and enable the company to focus on growth through geographic expansion.</li>
</ul>


Nikkei reported yesterday that Seven &amp; I Holdings (3382 JP) is in final negotiations to sell its underperforming department store business Sogo Seibu, amidst pressure from several of its investors.
The company has indirectly confirmed the news by saying that they are considering changes to Seven &amp; I’s business portfolio including the sale of the Sogo &amp; Seibu business.
The disposal of underperforming department stores could increase the efficiency of capital usage and generate upside to shareholders returns and enable the company to focus on growth through geographic expansion.


Seven & I to Sell The Loss Making Department Store Business Amidst Pressure From Investors

Japan

Isetan Mitsukoshi Holdings Ltd. is a holding company established through a merger of Mitsukoshi and Isetan. The group operates department stores nationwide, selling clothing, foods, household goods, cosmetics and general merchandise.

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Isetan Mitsukoshi Holdings Ltd (3099 JP)

Japan Department Stores: Sales Recovery but the Real Opportunity Is in Margin Growth

The Japanese department store sector suffered terribly during the pandemic and is in long-term decline but key companies are rebounding strongly...

Michael Causton

50% of Sales at Isetan-Mitsukoshi Flagships from Top 5% of Customers

Isetan-Mitsukoshi is focusing on VIPs which already account for 50% of sales at its flagships but this is not enough. Drags on sales and profits...

Michael Causton

Cautiously Optimistic Following Downtrend Reversals; Japan Continues to Lead; Bottoms-Up Stock Rec's

The bear market rally that we were on watch for started last week, confirmed by the bullish reversals on the DAX, Hang Seng, MSCI China $MCHI, and...

Vermilion Research

J-Front (3086) | Recent Datapoints Point to High-End Shoppers Loosening the Purse Strings

J-Front Retailing is a beneficiary of COVID normalisation and eventual resumption of inbound tourism. The restructuring and cost cuts bode well for...

Mark Chadwick

Seven & I to Sell The Loss Making Department Store Business Amidst Pressure From Investors

Nikkei reported yesterday that Seven & I Holdings (3382 JP) is in final negotiations to sell its underperforming department store business Sogo...

Oshadhi Kumarasiri

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