Isetan Mitsukoshi Going Their Own Way
With department store sales still in decline as well as customers and purchases per customer falling, Isetan Mitsukoshi is going its own way when it comes to improving and increasing sales.
While other department stores are of course cutting costs by restructuring workers and closing stores, as well as being creative and courting new tenants, i.e., Matsuzakaya & Forever 21 and Takashimaya & Uniqlo, Mitsukoshi is renovating its existing Ginza store as well as opening a new annex in Ginza. In fact Mitsukoshi is so sure that renovating existing stores will help reclaim customers and increase sales they also plan on renovating the Shinjuku Isetan store and Nihonbashi Mitsukoshi store both slated to be completed by 2012. The costs of the renovation for the Ginza Mitsukoshi store including upgrading and integrating the computer systems, is 42 billion and will realize a 50% increase in floor space – Mitsukoshi is projecting 63 billion yen in sales for the first year after it reopens next month on 11 September.
Isetan Mitsukoshi Holdings’ strategy is to dominate markets in major cities, i.e., Tokyo and Osaka by strengthening their flagship stores – a good strategy if it works though if sales do not increase as they project they will most likely lose out to competitors like J. Front Retailing and Takashimaya who have taken a more creative and less cost-incurring strategy to increase sales.
Do you think Isetan Mitsukoshi’s renovations will help reclaim customers and increase sales? Or is their strategy of just adding on to a non-performing business model just a band-aid on the real problems facing Isetan Mitsukoshi?
