.

[nottu]

[Catoneinutica]

The massive number of saleswomen at a typical J-department store can't be missed, but what's more astonishing is the legion of flunkies, toadies, flops, and other species of oyaji working behind the scenes. It's amazing that the paradigm has survived for as long as it has; huge public subsidies are doubtless involved.

I'm not sure that the demise of the current bloated incarnation of the J-department store would be a bad thing. They have the effect of snuffing out small businesses in whatever retail ecosystem they're located, which is more often than not a train station since so many of them are owned by rail operators.

[Mulboyne]

...so many of them are owned by rail operators.

The railways have a lot of department stores but they are among the worst and not even really in the same game any more. Clothing sales are important to department stores but railway-related stores are also-rans in the business. Here's a recent ranking:



Seibu has significant clothing sales but it was absorbed by Seven & I Holdings along with Sogo and is no longer part of a railway group (it was effectively separate anyway because of the split between the Tsutsumi brothers). The biggest railway department stores are Hankyu and Tokyu but they are a distant 7th & 8th in the industry rankings.

The likes of Odakyu, Keio, Meitetsu etc have been left floundering. Roy over at Mutant Frog was prompted by Hankyu's decision to close its Kyoto store to write a history of department stores in Kyoto. He is planning a follow-up looking at the demise of the sector which should be interesting.

There was a famous Japanese retail sector analyst who decided that he only had time to cover the major stocks in the market because "those are the ones the big investors hold and that's what they want to know about". He wasn't interested in specialty retailers like Shimamura, Fast Retailing (Uniqlo), Yamada Denki or Book Off and gave them to his juniors. Within a few years, he went from being a top-ranked analyst to a dinosaur. By the time he had figured out his mistake, it was too late for him to take back coverage and he found himself out of a job.

[nottu]

[dimwit]

I tend to have a love-hate relationship with department stores. I really need to find a good excuse to go to them but they are a social benefactor in that they serve as a biddy magnet and thus make the shops that I am likely to frequent less crowded with doddering hags trying to figure out how to use the ATM. Additionally, the fact that department stores are usually on train lines has probably cut the number of traffic fatalities in half as old bats don't have to drive to the suburban mall.

I do find that some department store do have a much better selection of high end alcohol than I ever find at even the big liquor shop chains.

[Catoneinutica]

The railways have a lot of department stores but they are among the worst and not even really in the same game any more. Clothing sales are important to department stores but railway-related stores are also-rans in the business. Here's a recent ranking:



Seibu has significant clothing sales but it was absorbed by Seven & I Holdings along with Sogo and is no longer part of a railway group (it was effectively separate anyway because of the split between the Tsutsumi brothers). The biggest railway department stores are Hankyu and Tokyu but they are a distant 7th & 8th in the industry rankings.

The department stores owned, past or present, by railways are ipso facto the ones with the best in-station or station-adjacent locations, and, as retailers here will tell you, act like an old-growth forest canopy, blocking out sunlight and customers to small shops. Dimwit alludes to one reason in his post.

There was a famous Japanese retail sector analyst who decided that he only had time to cover the major stocks in the market because "those are the ones the big investors hold and that's what they want to know about". He wasn't interested in specialty retailers like Shimamura, Fast Retailing (Uniqlo), Yamada Denki or Book Off and gave them to his juniors. Within a few years, he went from being a top-ranked analyst to a dinosaur. By the time he had figured out his mistake, it was too late for him to take back coverage and he found himself out of a job.

Out of a job? Bitter medicine indeed for simply running with the Herd! He sounds no worse than all those "analysts" ("salespeople" - let's be honest) who were touting net stocks in 1999 or real estate in 2006.

-catone
-oh well, perhaps a second act awaits. Even Nick Leeson seems to have gotten one.

[Catoneinutica]

...doddering hags trying to figure out how to use the ATM.

It's pretty much impossible to overestimate the amount of time one of these old crows - sometimes they're more the obatarian/battleaxe type - can monopolize an ATM machine. Obnoxious sighs and mutterings of "o-SEH" can sometimes speed them up, however.

[Screwed-down Hairdo]

"analysts" ("salespeople" - let's be honest)

I think they can be summed up even better by just the first four letters of the word....

[Mulboyne]

The department stores owned, past or present, by railways are ipso facto the ones with the best in-station or station-adjacent locations

There's a lot of truth in that but it doesn't tell the whole story. Here are the highest-grossing department store locations in Japan over the last 10 years:

1. Mitsukoshi (Nihombashi)
2. Isetan (Shinjuku)
3. Hankyu (Umeda)
4. Seibu (Ikebukuro)
5. Takashimaya (Yokohama)
6. Takashimaya (Osaka)
7. Takashimaya (Tokyo - can't remember if it's the Nihombashi or Shinjuku one)
8. Kintetsu (Abeno)
9. Matsuzakaya (Nagoya)
10. Tokyu (Shibuya)

As you can see, there are some good station locations in that list but both Odakyu and Keio Department stores have stores right on top of Shinjuku Station and yet it's Isetan down the road which does all the business. JR stations are some of the busiest in the country and, obviously, the private railway-related stores can't get access to those sites because they are competitors. Even so, Daimaru's location on top of Tokyo Station doesn't even make the top 10 list which is headed by Mitsukoshi a couple of kilometres away.

Hankyu, Seibu and Kintetsu prove that some railway-related stores can capitalize on their station locations if they aren't run brainlessly but, as nottu points out above, smaller retail stores in the same sites often do better.

[Catoneinutica]

I wonder if their fortunes are reversing in that respect. The small retail stores operating in the lower level of Kyoto station and the perimeter are probably doing better than Isetan. The same could be said for all the shops on Shijo and Kawaramachi Dori that strangled Hankyu and may be doing the same to Takashimaya.

An Army of Davids - sounds good!

[nottu]

[dimwit]

I'm not negative towards the potential for department store especially considering that they tend to cater to older women with disposal income which is of the few areas of potential growth in the future given Japan's demographics.