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)

Department store sales in 2020 dropped to levels not seen since 1975 and the latest state of emergency has led to more store closures. In some ways, the remaining department stores did well to achieve CY2020 sales only 25% lower than the year before and city centre stores should revive once traffic returns.Meanwhile, there are opportunities to rethink how former department store buildings can be redeveloped.

Department store sales in 2020 dropped to levels not seen since 1975 and the latest state of emergency has led to more store closures. In some ways, the remaining department stores did well to achieve CY2020 sales only 25% lower than the year before and city centre stores should revive once traffic returns.Meanwhile, there are opportunities to rethink how former department store buildings can be redeveloped.

Japan's Department Store Sales Drop to 1975 Levels

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 <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.
The following is an in-depth review of the sector with the following sections:
<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>
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.

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

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:<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>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>.

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)

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:
<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>
As this is an in-depth insight, the review is split into two parts to make it easier to read.  This is Part II which provides snapshot reviews of each format/sector. <a href="https://www.smartkarma.com/insights/the-japan-retail-review-winners-and-losers-in-japanese-retailing-part-i" target="_blank" rel="noopener">Part I, which provides a quick overview of all retailing, can be read here</a>.

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 II which provides snapshot reviews of each format/sector. Part I, which provides a quick overview of all retailing, can be read here.

Japan Retail Review 2019-20 Part II: A Sector by Sector Review of Winners and Losers

'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.

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/139/255/original/2020-06-11_08-36-54.png?1591832240" class="editor-image img-responsive" data-smartkarma-image-id="139255"></figure><div class="content-caption">Source: Japan Analytics</div>STRESS TESTS - This Insight is the first in a series that will use a variety of standard and less-frequently used 'stress-tests' to look through the current euphoria and assess where business risk is concentrated among larger Japanese companies. According to Tokyo Shoko Research, 171 listed Japanese firms have raised nearly ¥10 trillion in new funds to weather COVID-19.ALTMAN Z-SCORES - The first Insight will update our earlier Who's<a href="https://www.smartkarma.com/insights/japan-who-s-swimming-naked-part-2-altman-z-score" target="_blank" data-smartkarma-citation="insights:37316" rel="noopener"> Swimming Naked?</a> Insight and focus on the Altman Z-Score as updated for the most recent quarterly results for both manufacturing and non-manufacturing companies.  In each category, ee will look at both the companies that are below Altman's 'distress' levels and those companies that have the most significant negative deviation from their seven-year average score. Only six of the bottom-thirty manufacturing and five of the bottom-thirty manufacturing companies have outperformed over one year. Many are already Oversold and offer potential value opportunities -as with <a href="https://www.smartkarma.com/entities/nissan-motor-co-ltd" target="_blank" data-smartkarma-citation="entities:72:1" rel="noopener">Nissan Motor (7201 JP)</a> which is now as distressed as when Carlos Ghosn first arrived.  QUASI-FINANCIAL FIRMS - The Z-Score methodology does not work for financial firms. Accordingly, five non-financial companies which have significant financial subsidiaries -  <a href="https://www.smartkarma.com/entities/rakuten-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten (4755 JP)</a>, <a href="https://www.smartkarma.com/entities/z-holdings-corp" target="_blank" data-smartkarma-citation="entities:19603:1" rel="noopener">Z Holdings (4689 JP)</a>, <a href="https://www.smartkarma.com/entities/japan-post-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:359:1" rel="noopener">Japan Post (6178 JP)</a>, <a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank Group (9984 JP)</a> and <a href="https://www.smartkarma.com/entities/sony-corp" target="_blank" data-smartkarma-citation="entities:563:1" rel="noopener">Sony (6758 JP)</a>- have been excluded from this analysis.

Source: Japan AnalyticsSTRESS TESTS - This Insight is the first in a series that will use a variety of standard and less-frequently used 'stress-tests' to look through the current euphoria and assess where business risk is concentrated among larger Japanese companies. According to Tokyo Shoko Research, 171 listed Japanese firms have raised nearly ¥10 trillion in new funds to weather COVID-19.ALTMAN Z-SCORES - The first Insight will update our earlier Who's Swimming Naked? Insight and focus on the Altman Z-Score as updated for the most recent quarterly results for both manufacturing and non-manufacturing companies.  In each category, ee will look at both the companies that are below Altman's 'distress' levels and those companies that have the most significant negative deviation from their seven-year average score. Only six of the bottom-thirty manufacturing and five of the bottom-thirty manufacturing companies have outperformed over one year. Many are already Oversold and offer potential value opportunities -as with Nissan Motor (7201 JP) which is now as distressed as when Carlos Ghosn first arrived.  QUASI-FINANCIAL FIRMS - The Z-Score methodology does not work for financial firms. Accordingly, five non-financial companies which have significant financial subsidiaries -  Rakuten (4755 JP), Z Holdings (4689 JP), Japan Post (6178 JP), Softbank Group (9984 JP) and Sony (6758 JP)- have been excluded from this analysis. 

🇯🇵 JAPAN - Stress Tests Part 1 - Altman Z-Scores

Japan

Kintetsu Department Store Co., Ltd. operates department stores mainly in Osaka, Nara, Kyoto, and other Kansai prefectures. The Company sells clothing, foods, as well as other household items. Kintetsu Department Store also operates restaurants.

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

Kintetsu Department Store (8244 JP)

Japan's Department Store Sales Drop to 1975 Levels

Department stores have been hit hard by the current crisis but were struggling before that. As a result, sales have fallen to 1975 levels. Sales...

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

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 Retail Review 2019-20 Part II: A Sector by Sector Review of Winners and Losers

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 - Stress Tests Part 1 - Altman Z-Scores

STRESS TESTS - This Insight is the first in a series that will use a variety of standard and less-frequently used 'stress-tests' to look through...

Campbell Gunn

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)