TOPMESSA

GEWe Will Accelerate the Efforts toward theEstablishment of New Department Store
Model to Enhance Our Corporate Value.
We would like to express our deepest sympathy to all those

In order to expand our target market, we need to increase theaﬀected by the Great East Japan Earthquake and pray for theirassortment of value for money and department store worthy low- tosafety and earliest possible recovery.

middle-priced items, which are strongly demanded by the current

J. Front Retailing is working on establishing a new department

consumers, while maintaining the middle to super-high price range
range

store model toward the renewal of its core department store

that department stores have traditionally been good at. We basebasebusiness. We have two important tasks of our new department

our merchandise policy on high sensitivity, high quality and goodstore model including the improvement of market response

taste and introduce reasonably priced products that not only arecapabilities and a structural switch to highly eﬃcient operation.

low-priced but also keep department store worthy levels when

Striking and the most important changes in the recent consumer
consumermarket are the trend toward a more casual lifestyle andbelt-tightening and higher price sensitivity.

increasing the lineup of low- to middle-priced goods.
In order to expand our target customer base, we develop sales
sal

These two major

space targeting young people that existing department stores hahaveve

changes have developed with the economic globalization and were

not put much eﬀort into, and we will oﬀer brands and shops

accelerated rapidly by Lehman s collapse. However, existingtargeted at young people, which customers newly expect fromdepartment stores failed to meet these signiﬁcant market changes
changes

department stores, with the addition of department store worthy

because they did not change their traditional selection of brands
brandsstore environment, high quality image and meticulous services.

and merchandise focused on women of mature age and high-income

Our main urban large-scale stores with more than 50,000 squaresquarepersons as their main target customers, high-grade and high-priced

meters of retail space will be able to select and assort aitems and authentic and dress-up fashion tastes. As a result, while

well-balanced and wide variety of brands and merchandise ranging
ranging

narrowing their target market and customer base, they became

from great value and reasonably priced items to luxury goods byincreasingly homogenized.

revising the traditional lineup too heavily weighted toward

Our new department store model addresses adaptation tohigh-priced luxury products. In addition to that, it is quite possible

these major market changes including the trend toward a more

to widely cater to young to older age groups in a balanced mannermannercasual lifestyle and belt-tightening and higher price sensitivity

while continuing to serve and even better serving existing

and the expansion of our target market and customer base.

customers of mature age.

Speciﬁcally, we thoroughly analyze the regional market of each

The results of our past eﬀorts are obvious in the form of thethestore, develop a store strategy with the aim of enhancing

recent increased number of people visiting our stores. We

competitiveness in each area and drastically review the lineup ofunderstand that is because the customers who had moved to otherproducts and brands and sales services based on this store stra
strategy.
tegy.

retail channels including shopping centers and station buildings
buildings

OKUDA Tsutomu
Chairman and CEO

visit Daimaru and Matsuzakaya stores. Amid declining purchaseand the Tokyo metropolitan area in a bid to further streamline

amount per person due to customers continuing belt-tightening

operations as well as establishing an operation system for each sales

and higher price sensitivity, we believe we will be able to boost

operation type and promoting eﬃcient personnel distribution andsales by increasing the number of people visiting our stores as welltraining based on these systems. We will radically overhaul all

as increasing the quantity purchased per shopper by using theother costs with no sacred cows to further control costs.

department stores strengths of a wide selection of products andhigh quality services, which no other retail channels have.

In addition to the eﬀorts mentioned above, we will change
business structure from the traditional management with an

In order to respond continuously and quickly to market changes,

excessive focus on department store business to raise proﬁts and

we are trying to ﬁnd new suppliers that have not done businessgrow in a balanced manner throughout the Group by reinforcing

with department stores and develop new brands and merchandise

existing aﬃliated businesses and increasing expansion into newin collaboration with existing suppliers. In addition, we will create

growth areas including internet retailing. To this end, instead of

a division specializing in marketing, which will develop newconcentrating management resources on department store business,merchandise including intangible items and services and collectwe will make a well-balanced investment in aﬃliated businesses asand analyze information on new suppliers, and develop retail spacespwell.

new to department stores to meet the customer demands that couldcoul

In March 2011, StylingLife Holdings Inc., a company operating

not be satisﬁed within the framework or organization formed byvariety stores PLAZA, cosmetics business, direct marketingthe traditional product classiﬁcation such as women s wear andbusiness and restaurant and confectionery business, became ourmen s wear.

equity method aﬃliate and we will continue to work on allianceWith regard to the independent operation type sales sections inand M&A.

which department stores are responsible for their activities from

The recent great earthquake is one of the greatest crises inbuying to selling, we will further strengthen them as department
departmen

Japanese history and we believe the most important mission

stores unique advantage over other retail channels and as a

imposed on us in this situation is to contribute to the early recovery

diﬀerentiating strategy from other department store chains in termsof the Japanese economy as one company. Taking this crisisof competitive strategy as well as from the perspective of proﬁt.
proﬁ

positively as an opportunity to expedite further changes, J. Front

With respect to a structural switch to highly eﬃcient operation,
opera

Retailing will further accelerate management reforms including thewe will continue to promote mainly radical reforms of personnel

establishment of a new department store model and accumulate

structure. We will consolidate back-oﬃce sections, which aretangible results to enhance its corporate value.

placed individually in each store, by area such as the Kansai areaaJune 2011