Segment Overview

At a Glance● The percentage of total sales represents the ratio of sales to external

Sales and operating income

customers after eliminating intersegment sales.
● Sales and operating income include inter-segment transactions.
● The figures for fiscal 2007 are in real terms. (※)

Percentage of total sales

Sales (¥Million)
898,756

836,189

Operating income (¥Million)
34,089Department store business

21,61676.1%
Percentage of total sales

Fiscal
2007

Fiscal2008

Sales (¥Million)
133,323

130,660

Fiscal
2007

Fiscal2008

Operating income (¥Million)
1,811Supermarket business1,105

11.5%
Percentage of total sales

Fiscal
2007

Fiscal2008

Sales (¥Million)

Fiscal
2007

Fiscal2008

Operating income (¥Million)

90,622

87,1393,327

Fiscal
2007

Fiscal
2008

Fiscal2007

3,572

Wholesale business
7.2%
Percentage of total sales

Sales (¥Million)
108,107

Other businesses

91,688

Fiscal2008

Operating income (¥Million)
3,972
2,558

5.2%

Fiscal
2007

Fiscal
2008

Fiscal
2007

Fiscal2008※The amounts in annual real terms for fiscal 2007 are the consolidated figures of Daimaru and Matsuzakaya groups for the year from March 1, 2007 to February 28, 2008.
28

Department store business
Overview for ﬁscal 2008

Daimaru posted sales of ¥453.4 billion (a year-on-year decline ofDuring ﬁscal 2008, this segment worked mainly on theof 45.8%) on a non-consolidated basis, whereas Matsuzakaya saw

enhancement of marketing functions and store strategy, therestructuring of sales ﬂoor operation structure and the reinforcementof regular customer base.
Since competition within regions, which were among department
stores, are becoming complex and multilayered beyond industrial
boarders, it is important to base our strategies on the enhancementof store competitiveness to increase our share in the competition ofeach region for survival. For this purpose, J. Front Retailing began
to develop new store strategies mainly for priority stores including5.9%) and operating income of ¥10.4 billion (a year-on-year decline
sales of ¥259.9 billion (a year-on-year decline of 8.9%) andoperating income of ¥5.7 billion (a year-on-year decline of 27.6%).
Aﬃliated department stores including Hakata Daimaru also saw
both revenue and proﬁt fall and sales and operating income of thewhole department store business were ¥836.1 billion (down 7.0%
from the previous year) and ¥21.6 billion (down 36.6% from theprevious year) respectively.

Outlook for ﬁscal 2009

Daimaru Shinsaibashi and Kobe stores and Matsuzakaya Nagoyaand Ueno stores, while strengthening marketing sections andFor the ﬁrst half of ﬁscal 2009, this segment expects sales ofperforming qualitative and quantitative analyses. In addition,

department store business to be ¥367.7 billion (a year-on-year

Daimaru Shinsaibashi store has decided to acquire the adjoining

decline of 12.7%) based on the assumption that the sales trend forstore real estate to improve and expand the business infrastructure

the second half of ﬁscal 2008 will continue. It is more diﬃcult totoward the strengthening of store competitiveness.

forecast the economic trends for the second half than those for theTo rebuild sales ﬂoor operation structure, Daimaru drasticallyﬁrst half. In light of some reaction against a sharp drop in sales inchanged the sales operation structure mainly of women s wear andthe second half of the previous year and the results of management

men s wear departments toward the complete form of store-based

measures to be taken during ﬁscal 2009, the companies projectsales reform. Speciﬁcally, the company divided sales ﬂoor

sales for the second half of the year to be ¥378 billion (down 9.0%

operation into independent operation type and shop operationfrom the previous year) and annual sales to be ¥745.7 billion (atype and redesigned operations to ﬁt the features of each type.

decrease of 10.8% from the previous year).

Based on the structure, we reviewed the roles of the headquarters

In the meantime, in ﬁscal 2008, selling, general andand stores. Matsuzakaya introduced the know-how of theadministrative expenses decreased by ¥6.9 billion compared withstore-based sales reform that Daimaru has tackled in the past to

the previous year, and in ﬁscal 2009, the companies will further

Nagoya, Ueno and Shizuoka stores in March and all other stores in

reduce them by ¥10.3 billion. In spite of the factors increasing

September to promote the standardization and centralization ofthem by ¥4.6 billion including retirement beneﬁt expenses (aoperations.

year-on-year increase of ¥1.7 billion), the companies will strictly

To reinforce regular customer base, the card systems of Daimaru

control expenses through the eﬀects of the closure of Yokohama

and Matsuzakaya were standardized in March and Matsuzakaya

Matsuzakaya and Imabari Daimaru in ﬁscal 2008 and the reduction

issued Matsuzakaya Card that has the same functions asof personnel expenses by not ﬁlling the positions of retirees and inDaimaru Card.

That allowed central control of vast amount ofother areas including advertising, rent and logistics. As a result ofdata on more than four million customers and the customer

these eﬀorts, operating income in this segment for ﬁscal 2009 is

information infrastructure, which can be utilized eﬃciently for sales

expected to be ¥6.5 billion (down 69.9% from the previous year).

activities and sales promotion, was established.
In addition, in order to increase our presence in Tokyo area,

These projections do not include the eﬀects of the new annex to
Shinsaibashi store that will open in November.

Matsuzakaya Ginza store remodeled its sales ﬂoors with a focus on
the basement food ﬂoor, accessories department on the ﬁrst ﬂoorand women s shoes department on the second ﬂoor targeting
working women in their 30s, and successfully attracted newcustomers.
However, consumption environment became worse in the latter
half of the year. The main stores of the Group such as Daimaru
Shinsaibashi and Kobe stores and Matsuzakaya Nagoya store
suﬀered sluggish sales of clothing and big-ticket items. As a result,

Matsuzakaya Ginza store reopened after remodeling29Supermarket business
Overview for ﬁscal 2008

Outlook for ﬁscal 2009

In September 2008, Daimaru Peacock Co., Ltd., Matsuzakaya

Since the consumption environment is uncertain, the businessStore Co., Ltd., Yokohama Matsuzakaya Store Co., Ltd. andenvironment is expected to become severer. This is why, during

Nozawa Shoji Co., Ltd. were integrated into a new company

ﬁscal 2009, Peacock Stores will open only Nikke Colton Plaza

named Peacock Stores Ltd. to increase competitiveness andstore in May and reopen Rokkakubashi store in fall, which has

proﬁtability. Through this integration, the company centralized

been closed for rebuilding, while focusing on the revitalization ofits product buying functions to strengthen purchasing capabilities

the existing stores and enhancing cost eﬃciency toward low-cost

while developing information systems including POS andmanagement through the improvement of the operations of theunifying the headquarters functions.

head oﬃce and the headquarters. Through these eﬀorts, theIn order to strengthen the operational base, Peacock Storescompany projects sales of ¥127.5 billion (down 2.4% from theactively worked on scrapping and building by opening six new

previous year) and operating income of ¥0.9 billion (down 18.6%

stores in dominant areas, including Shinsenri Nishimachi, Dojima

from the previous year).

Crosswalk, Kanda Tsumakoisaka and Kami Ikebukuro stores andnew type small urban stores Exe Peacock, and closing two
unproﬁtable stores. The company did extensive remodeling ofhighly proﬁtable downtown stores including Kyodo, Yokodai andSales by district (Year ended February 2009)

Korigaoka stores to attract more customers.
However, sales and operating income were ¥130.6 billion(down 2% from the previous year) and ¥1.1 billion (down 39.0%
from the previous year) due to consumers growing awareness ofthe defense of their livelihood and the eﬀects of the rebuilding

Chubu district 8%Tokyo district 58%

Kansai district 34%

and closure of large scale stores.

■ Store locations (As of May 2009)
Tokyo district(54stores)■ Daimaru Peacock

Peacock Store Korigaoka

Private brand Peacock Choice30

AoyamaSodegaura
Takanawa Gyoranzaka
MejiroJiyugaoka
Asagaya
Shimokitazawa
Fujisawa
MisatoEbis
Tama
Kunitachi Sakuradori
TsurumiYokohamabashi
Kugayama
Takadanobaba
Azabu JubanIogi
Kyodo
Shinurayasu
Toritsukasei
Sakurashinmachi
Takanodai
Granpark Tamachi
Higashikoganei
Kamiikedai

Bunkyo Green Court
Mita Isarago
Tamagawa Josui
Ishikawadai
Hanakoganei
Kunitachi Bentendori
Fujisawa Treage Shirahata
Sangenchaya no Mori
Tornare Nihonbashi Hamacho
Daikanyama Peacock
Higashi Ikebukuro
Shibaura Island
Daimaru Tokyo Store
Kanda Tsumakoisaka■ Matsuzakaya Store
Takenotsuka
Ebisu Minami
TakashimadairaTokiwadairaToyoshiki
Ojima
Katakuracho
HongodaiIsogo■ Exe Peacock
Passage Aoyama
Granduo Kamata■ Peacock Store
Kami Ikebukuro
Yokodai
Nikke Colton Plaza※Closed due to rebuilding
Daimaru Peacock Rokkakubashi(Reopen in fall 2009)

Daimaru Peacock Nakano(Reopen in winter 2010)

Kansai district(31 stores)■ Daimaru Peacock
Senri Daimaru Plaza
Tsukumodai
Kitasenri
MeimaiNakamiya
Chayamadai
Harumidai
Takakuradai
Matsugaoka
Myodani
Karibadai
Tsukahara
HoshidaSenri Minamimachi Plaza
Ashiya Nangu
Koshien

KotoenYamadaMukonoso
Senriyama
Mino Sakuragaoka
Konan
Ashiya Kawanishi
Kitayamato Mayumi
Takarazuka Nakayama
Mino Gein
Nishi Umeda
Shin Kobe
Shinsenri Nishimachi
Dojima Crosswalk■ Peacock StoreKorigaoka

Chubu district(8 stores)■ Matsuzakaya StoreMotoyama
Tsukimigaoka
Fujigaoka
HishinoHongo
Hirabari
MiyoshiChiyodaWholesale business

Other businesses

Overview for ﬁscal 2008

Overview for ﬁscal 2008

A wholesale company Daimaru Kogyo, Ltd. deals in electronic parts, foodproducts, software, chemical products, metal and resin products, housing

Other businesses mainly include a design and construction business and amaterials, apparel and ﬁshing rods. The company has 16 business places incredit business.

Japan and abroad and provides solutions to customers mainly in theIn September 2008, four design and construction companies weretriangular market including Japan, China and ASEAN through various

integrated into a new company named J. Front Design & Construction Co.,

services ranging from the procurement of industrial materials and retailLtd. Its business lines include the interior ﬁnish works of stores and ships

merchandise to after-sales care.

and the production and sales of interior furniture and special mirrors. The

During ﬁscal 2008, the company strived to enhance the capabilities tocompany provides high quality plans, designs, constructions and products.

make suggestions to the existing customers, develop new merchandiseDuring ﬁscal 2008, the company accepted orders for the remodeling of

mainly in soft business areas and cultivate new customers, while strongly

commercial facilities including Hakata Daimaru, Daimaru Kobe store andpromoting the transformation of the business structure primarily in metal andMatsuzakaya Ginza store of the Group and the repair works of hotels. Aresin products and housing materials. By merchandise category, electronic

credit company JFR Card Co., Ltd. issued Matsuzakaya Card in Marchdevice-related products and ﬁnished food materials continued to sell strongly,

2008 by standardizing the card system with Daimaru and devoted all its

but sales of other products were sluggish due to ﬁercer competition andenergies to cultivating new customers and encouraging the existing

decreased demand. Daimaru Kogyo made an eﬃcient use of costs to reduce

customers to replace their old cards with the new ones. As a result, theselling, general and administrative expenses. As a result, sales decreased torevenue base including merchant fee is steadily expanding.

¥87.1 billion (down 3.8% from the previous year), but operating incomeincreased to ¥3.5 billion (up 7.4% from the previous year).

However, sales of design and construction business decreased, aﬀectedby the backlash against the extensive renewal work of Tokyo store, whichrelocated and opened with increased ﬂoor space in November 2007, and a

Outlook for ﬁscal 2009

decline in orders caused by the reduction of business investment and sales

For ﬁscal 2009, based on the assumption that the competition environmentyear). In addition, JFR Card incurred large temporary expenses resulted fromin this segment decreased to ¥91.6 billion (down 15.2% from the previous

including prices will become severer, the company will ① maintain andexpand the core electronic device business; ② expand the business with J.
Front Retailing Group by exercising its purchasing capabilities andinformation capabilities to contribute to the Group synergy; ③ develop andthe issue of Matsuzakaya Card and operating income in this segment
decreased to ¥2.5 billion (down 35.6% from the previous year).

Outlook for ﬁscal 2009

create new businesses multilaterally; ④ promote the triangular market
structure including Japan, China and ASEAN; ⑤ change the business andFor ﬁscal 2009, JFR Card expects to increase sales and proﬁt because theproﬁt structures based on selection and concentration to thoroughly increase

recruitment of new cardholders and temporary expenses will come full circle.

competitiveness; and ⑥ establish and operate the internal control system toIn the entire segment, however, assuming that the business environment willrealize the sophistication of the management as its basic strategy and basic

become increasingly severe, we forecast sales and operating income to bepolicy. Sales and operating income are expected to be ¥75.5 billion (down¥87 billion (down 5.1% from the previous year) and ¥2.1 billion (down13.4% from the previous year) and ¥2.9 billion (down 18.8% from the17.9% from the previous year) respectively.

previous year).

DalianPeople s Republic of China Shanghai

NanshaTaiwanTaipeiHong Kong

Myanmar
YangonThailandKita-Kanto (Gunma)O s residence

NagoyaBangkok

Ho Chi Minh

Indonesia
Jakarta

Store U: PONTEVECCHIO31