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)

With shoppers staying away in March and April, department stores are suddenly the most vulnerable sector of all.Some department stores have improved in the past 20 years and, in the past five, the big players have poured investment into more modernisation. This has brought some success to the top firms, especially from wealthy consumers, but no one could have seen the virus crisis coming.A major cull of stores was already expected, but those cuts are now likely to go much deeper. A sector that once had 313 stores and is now already down to 205 may only have capacity for 100.A few chains will survive and thrive, however.

With shoppers staying away in March and April, department stores are suddenly the most vulnerable sector of all.Some department stores have improved in the past 20 years and, in the past five, the big players have poured investment into more modernisation. This has brought some success to the top firms, especially from wealthy consumers, but no one could have seen the virus crisis coming.A major cull of stores was already expected, but those cuts are now likely to go much deeper. A sector that once had 313 stores and is now already down to 205 may only have capacity for 100.A few chains will survive and thrive, however.

Japan's Department Stores: The Most to Lose but Also the Hardest Hit

Top department stores generally performed well in the 12 months to December 2019, but compared to five years ago, most stores and most regions are well down as the sector continues to shrink.There are exceptions however with Hankyu's Umeda store up 17% in five years and Kintetsu Abeno up by 10%. Among the top chains,  <a href="https://www.smartkarma.com/entities/takashimaya-co-ltd" target="_blank" data-smartkarma-citation="entities:370:1" rel="noopener">Takashimaya (8233 JP)</a> is currently driving what growth there is, with sales up a remarkable 14% in the last five years, proving that there really is potential in these traditional old buildings.Over the next three years, the sector will decline yet further but a few chains will prosper.

Top department stores generally performed well in the 12 months to December 2019, but compared to five years ago, most stores and most regions are well down as the sector continues to shrink.There are exceptions however with Hankyu's Umeda store up 17% in five years and Kintetsu Abeno up by 10%. Among the top chains,  Takashimaya (8233 JP) is currently driving what growth there is, with sales up a remarkable 14% in the last five years, proving that there really is potential in these traditional old buildings.Over the next three years, the sector will decline yet further but a few chains will prosper.

Growth in the Declining Japanese Department Store Sector: Some Stores and Chains Show the Way

'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/000/127/809/original/2020-04-14_04-54-14.png?1586807683" class="editor-image img-responsive" data-smartkarma-image-id="127809"></figure><div class="content-caption">Source • Japan Analytics</div>A CLEARER VISION - Softbank last made an earnings forecast in December 2010; however, the startling losses at the Vision Fund have prompted them to be more forthcoming, perhaps not entirely unrelated to their buyback programme.  The revisions amount to a cut of 3% to forecast for annual operating profit and net income for the market overall. We will leave the implications for the NAV discount to <a href="https://www.smartkarma.com/profiles/kirk-boodry" target="_blank" data-smartkarma-citation="accounts:1920" rel="noopener">Kirk Boodry</a> and others to fill in; however, we would note that the more traditional revised BPS is now 1.26. <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/127/781/original/2020-04-13_18-22-38.png?1586769778" class="editor-image img-responsive" data-smartkarma-image-id="127781"></figure><div class="content-caption">Source • SNA</div>HOKKAIDO'S SECOND WAVE - Hokkaido has just reimposed a prefectural-level emergency having seen its second wave of infections after lifting restrictions on 19th March. Ten prefecture are imposing various degrees of quasi-lockdowns after Ishikawa-ken followed Aichi's example yesterday.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/127/816/original/File%202020-04-14%207%2027%2032.jpeg?1586816887" class="editor-image img-responsive" data-smartkarma-image-id="127816"></figure><div class="content-caption">Source • TMG <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/127/818/original/IMG_1317.jpg?1586817094" class="editor-image img-responsive" data-smartkarma-image-id="127818"></figure>
</div><div class="content-caption">Source • NHK</div>MONDAY CASE COUNT - Tokyo saw just 91 new confirmed cases yesterday; however, Monday's tend to be quieter days due to a lower amount of testing. The rest of the country saw 125 new cases - only three prefectures saw more than ten new cases.NOT SO FULL DISCLOSURE - Japan's FSA is planning to postpone the deadline for submitting yuho annual reports for listed companies closing in March for three months, until the end of September, given the impact of the COVID-19.  The unaudited short-form kessan tanshin statements will continue, however, certain items including data on shareholdings will be delayed. Annual General Meetings for March year-end companies that generally take place in June will also have to be postponed.In the DETAIL below, we shall review the large-cap results, revisions and initial forecast announcements made yesterday. The positive/neutral/negative balance for all 63 results was 29:9:25; for the 27 revisions/forecasts, the split was 11:1:15.

Source • Japan AnalyticsA CLEARER VISION - Softbank last made an earnings forecast in December 2010; however, the startling losses at the Vision Fund have prompted them to be more forthcoming, perhaps not entirely unrelated to their buyback programme.  The revisions amount to a cut of 3% to forecast for annual operating profit and net income for the market overall. We will leave the implications for the NAV discount to Kirk Boodry and others to fill in; however, we would note that the more traditional revised BPS is now 1.26. Source • SNAHOKKAIDO'S SECOND WAVE - Hokkaido has just reimposed a prefectural-level emergency having seen its second wave of infections after lifting restrictions on 19th March. Ten prefecture are imposing various degrees of quasi-lockdowns after Ishikawa-ken followed Aichi's example yesterday.Source • TMG 
Source • NHKMONDAY CASE COUNT - Tokyo saw just 91 new confirmed cases yesterday; however, Monday's tend to be quieter days due to a lower amount of testing. The rest of the country saw 125 new cases - only three prefectures saw more than ten new cases.NOT SO FULL DISCLOSURE - Japan's FSA is planning to postpone the deadline for submitting yuho annual reports for listed companies closing in March for three months, until the end of September, given the impact of the COVID-19.  The unaudited short-form kessan tanshin statements will continue, however, certain items including data on shareholdings will be delayed. Annual General Meetings for March year-end companies that generally take place in June will also have to be postponed.In the DETAIL below, we shall review the large-cap results, revisions and initial forecast announcements made yesterday. The positive/neutral/negative balance for all 63 results was 29:9:25; for the 27 revisions/forecasts, the split was 11:1:15. 

🇯🇵 JAPAN • Revisions & Results 13th April - A Clearer Vision

Japan is suffering as much as anywhere from the current coronavirus crisis. At least until March, the biggest issue was the country’s huge reliance on China as a supply base for everything from car parts to baby supplies, but as the government gave up hopes of running Abe’s Olympics in 2020, there is now an even greater sense of concern as parts of Japan enters a state of emergency and likely into long or short-term lockdown.This will continue to benefit retailers of FMCG and food, but it spells disaster for the travel and discretionary goods sectors.Apparel/footwear retailers suffered in March, <a href="https://www.smartkarma.com/entities/united-arrows-ltd" target="_blank" data-smartkarma-citation="entities:4887:1" rel="noopener">United Arrows (7606 JP)</a> dropped 25%, <a href="https://www.smartkarma.com/entities/right-on-co-ltd" target="_blank" data-smartkarma-citation="entities:16044:1" rel="noopener">Right On Co Ltd (7445 JP)</a> 40%, <a href="https://www.smartkarma.com/entities/abc-mart-inc" target="_blank" data-smartkarma-citation="entities:3213:1" rel="noopener">Abc Mart Inc (2670 JP)</a> 31% and <a href="https://www.smartkarma.com/entities/adastria-co-ltd" target="_blank" data-smartkarma-citation="entities:11895:1" rel="noopener">Adastria Co Ltd (2685 JP)</a> 24% – <a href="https://www.smartkarma.com/entities/workman-co-ltd" target="_blank" data-smartkarma-citation="entities:8467:1" rel="noopener">Workman Co Ltd (7564 JP)</a>  though bucked the trend with a 23% rise.<a href="https://www.smartkarma.com/entities/isetan-mitsukoshi-holdings-l" target="_blank" data-smartkarma-citation="entities:18871:1" rel="noopener">Isetan Mitsukoshi Holdings L (3099 JP)</a> saw sales down 35% in February with falls in traffic at all its major stores. Apparel sales were particularly poor, although food sales remained flat. In March, sales fell another 39.8%, with Mitsukoshi Ginza down 55.1%. <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's (3086 JP)</a> Daimaru Matsuzakaya’s sales fell 43% in February (duty-free sales were down 97%) and then 40.9% in March, while <a href="https://www.smartkarma.com/entities/hankyu-hanshin-holdings-inc" target="_blank" data-smartkarma-citation="entities:13058:1" rel="noopener">Hankyu Hanshin Holdings (9042 JP)</a> was down 28.1% in February and 38.1% in March. <a href="https://www.smartkarma.com/entities/takashimaya-co-ltd" target="_blank" data-smartkarma-citation="entities:370:1" rel="noopener">Takashimaya's (8233 JP)</a> sales fell 35.1% and 36.2% and Sogo Seibu 32% in both months.Japan’s government will certainly offer financial support, but this might not be enough for some long-ailing companies.

Japan is suffering as much as anywhere from the current coronavirus crisis. At least until March, the biggest issue was the country’s huge reliance on China as a supply base for everything from car parts to baby supplies, but as the government gave up hopes of running Abe’s Olympics in 2020, there is now an even greater sense of concern as parts of Japan enters a state of emergency and likely into long or short-term lockdown.This will continue to benefit retailers of FMCG and food, but it spells disaster for the travel and discretionary goods sectors.Apparel/footwear retailers suffered in March, United Arrows (7606 JP) dropped 25%, Right On Co Ltd (7445 JP) 40%, Abc Mart Inc (2670 JP) 31% and Adastria Co Ltd (2685 JP) 24% – Workman Co Ltd (7564 JP)  though bucked the trend with a 23% rise.Isetan Mitsukoshi Holdings L (3099 JP) saw sales down 35% in February with falls in traffic at all its major stores. Apparel sales were particularly poor, although food sales remained flat. In March, sales fell another 39.8%, with Mitsukoshi Ginza down 55.1%. J Front Retailing's (3086 JP) Daimaru Matsuzakaya’s sales fell 43% in February (duty-free sales were down 97%) and then 40.9% in March, while Hankyu Hanshin Holdings (9042 JP) was down 28.1% in February and 38.1% in March. Takashimaya's (8233 JP) sales fell 35.1% and 36.2% and Sogo Seibu 32% in both months.Japan’s government will certainly offer financial support, but this might not be enough for some long-ailing companies.

JAPAN Retail & Covid-19: FMCG Gain Amid Nationwide Retail Pain

Some retailers and brands would like February accounts to evaporate along with the virus that caused this unprecedented downturn. Department stores not only faced falling traffic from fears of contagion but also the ongoing hangover from the consumption tax increase, along with a warm winter and an earlier Chinese New Year.Sales were hammered but calls to retailers tell us March looks like being worse with some suggesting sales down as much as 50%.

Some retailers and brands would like February accounts to evaporate along with the virus that caused this unprecedented downturn. Department stores not only faced falling traffic from fears of contagion but also the ongoing hangover from the consumption tax increase, along with a warm winter and an earlier Chinese New Year.Sales were hammered but calls to retailers tell us March looks like being worse with some suggesting sales down as much as 50%.

Japan

Takashimaya Company, Limited., founded in Kyoto in 1831, operates department stores.  The Company's main stores are located in Tokyo, Osaka, and Kyoto. Takashimaya also operates department stores in Paris, France, Singapore, China, Australia, and New York, USA.  The Company retails clothing, foods, art objects, sundry goods, and household utensils.  The Company also operates restaurants.

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Takashimaya (8233 JP)

Japan's Department Stores: The Most to Lose but Also the Hardest Hit

With shoppers staying away in March and April, department stores are suddenly the most vulnerable sector of all.Some department stores have...

Michael Causton

Growth in the Declining Japanese Department Store Sector: Some Stores and Chains Show the Way

Top department stores generally performed well in the 12 months to December 2019, but compared to five years ago, most stores and most regions are...

Michael Causton

🇯🇵 JAPAN • Revisions & Results 13th April - A Clearer Vision

A CLEARER VISION - Softbank last made an earnings forecast in December 2010; however, the startling losses at the Vision Fund have prompted them to...

Campbell Gunn

JAPAN Retail & Covid-19: FMCG Gain Amid Nationwide Retail Pain

Japan is suffering as much as anywhere from the current coronavirus crisis. At least until March, the biggest issue was the country’s huge reliance...

Michael Causton

Japanese Department Stores Catch the Flu

Some retailers and brands would like February accounts to evaporate along with the virus that caused this unprecedented downturn. Department stores...

Michael Causton

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