Seven & I store closures hit regions

Losses have forced two Seven & I store closures in regional Japan, both outlets after 40 years of trading.

Seven & I Holdings, which owns the Sogo and Seibu department store chains, is closing a Sogo store in Kashiwa, Chiba Prefecture, and a Seibu store in Asahikawa, Hokkaido. Both are scheduled to shut their doors on September 30, and the company has not revealed any plans for either site.

Japan’s regional department stores have been hit hard by competition from major shopping developments and other factors. Also, they are not easily accessible for foreign tourists, so have not benefited from the tourism boom.

“It has been difficult to attract customers and we cannot continue to run deficits,” says Seven & I Holdings president Noritoshi Murata.

Sogo and Seibu are known for having a higher ratio of regional outlets than other major department store chains, says The Japan News. Since their sales peaked in the 1990s, both Sogo Kashiwa and Seibu Asahikawa have been on a downward trend.

Many other regional department stores have already closed. The Kenmin Department Store in Kumamoto, in business for more than 40 years under different names, shuttered in February last year. The Imari Tamaya store in Imari, Saga Prefecture, closed in January, citing a shrinking population, poor sales and other factors.

Run by Isetan Mitsukoshi Holdings, the Marui Imai department store in Hakodate, Hokkaido, has reported a 4.8 per cent drop in sales to ¥6.3 billion (US$55.46 million) for the nine months ending December compared to the same period the previous year. In contrast, the Mitsukoshi Ginza store in Tokyo logged ¥64.3 billion in sales during the same period, up 19.6 per cent from the previous year. The Ginza outlet has been helped by increased foreign tourism.

Department stores in 10 major cities sold about ¥12.1 million per 100 sqm in January, compared to about ¥5.68 million in regional stores, according to the Japan Department Stores Association.

“It will be difficult to close the gap,” says an association official.

Meanwhile, Isetan Mitsukoshi Holdings plans to increase small and midsize stores nationwide from 102 to 180 by the end of the 2018 fiscal year.

Takashimaya last year created in-store displays of cosmetics and other products available online instead of at the regional outlets themselves.

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