EDITORIAL: Department store woes

It is sad to see familiar department stores go out of business.

In Tokyo, the Seibu Yurakucho department store in the Yurakucho Mullion complex, once an enormously popular gateway to Ginza, will close its doors for good in December. And this year already, the Marui-Imai department store in Muroran, Hokkaido, and a Matsuzakaya outlet in Okazaki, Aichi Prefecture, have been shut down. Hankyu's Shijokawaramachi store in Kyoto is also set to close.

Last year, Mitsukoshi's Ikebukuro store in Tokyo and Sogo's main store in Osaka's Shinsaibashi district were shuttered. The shakeout among department stores is gaining momentum in this prolonged economic slump.

The global recession has worsened things for an already hard-hit department store industry that has struggled since the mid-1990s after the economic bubble burst. In the past 10 years, the number of department store operators fell from 140 to 86, while the number of stores has dropped to 270 from 310. Industrywide, annual total sales have plunged nearly 30 percent to 6.6 trillion yen ($74 billion), down from 9 trillion yen, over the decade.

The industry has shed jobs at an alarming pace. At the time-honored Mitsukoshi chain, about 1,600 employees, or a quarter of its workforce, applied for early retirement last year.

Department stores are facing increasingly tough competition from up-and-coming rivals amid the deflationary downturn. Retailers specializing in low-priced clothes, huge consumer electronics stores and online shops have gained popularity and drastically changed consumer purchasing behavior.

The department store industry appears to have fallen behind the times.

Traditionally, department stores focus on offering top quality for high prices. They place great importance on brand names, offer courteous customer service and sponsor events such as art exhibitions. This formula worked well to attract consumers nationwide up until the early 1990s.

Many department stores, however, have failed to map out a new future for themselves, relying on their reputations as long-established stores and the long-held mid-year and year-end gift-giving seasons.

Le Bon Marche, famed as the first department store in the world, opened its doors some 150 years ago in Paris. Originally, it won the hearts and minds of French consumers with innovative business approaches.

The retailer succeeded by offering a wide assortment of products, introducing price tags, using flashily decorated shop windows and holding seasonal sales.

Japanese department stores could learn much from the French pioneer. Instead of focusing only on luxury fashion brands, they should figure out ways to capitalize on their strengths while testing new merchandise and new approaches to boost sales.

Department stores have the ability to work with product makers to develop new items that can stimulate demand, as did the Uniqlo casual clothing chain with its hot-selling Heattech thermal underwear.

Shoppers still throng the basement food sections of department stores and special events featuring ekiben boxed meals (usually sold at train stations) or specialties from a certain region. Department stores in prime locations still have a great deal of potential.

Department stores and their wide range of high-quality products are also valuable tourist resources that can contribute to the government's policy of promoting tourism. Districts famous for their department stores, such as Tokyo's Ginza, Nihonbashi and Shinjuku areas, have great potential to become leading shopping districts in Asia. Making effective use of department stores nationwide as tourism resources would help revitalize the nation's economy.

The new Daimaru Matsuzakaya Department Store Co. was created through the merger between two major store chains and began operations on Monday.

Such bold steps toward realignment of the industry are what department stores must seek if they hope to survive in this competitive era.

--The Asahi Shimbun, March 2