SAGAMIHARA, Kanagawa Pref. — With the expertise nurtured in the American retail industry, Herbert Miller, chairman of American Malls International, is trying to reach out to Japanese consumers. If successful, he may help simplify the country’s multilayered retail structure.
Last week, Miller attended the opening of the outlet mall Xsite Worldmarket Place at Sagami Ono Station here. The project is jointly carried by the leading retail developer based in Washington, D.C. and Odakyu Electric Railway Co.
After a partial opening in November, the outlet mall — AMI’s first project in the country — was fully opened with 24 additional stores, making the total floor space on four floors 8,240 sq. meters.
The newly opened section of the mall is designed to feel like an Italian shopping street and offers famous brand-name items at 30 percent to 70 percent discounts for products ranging from clothes to interior and daily goods, according to the firm.
In the outlet mall project, Miller has taken on a challenge to revitalize the commercial complex, formerly run by Odakyu department store and closed in May 1998 after operating for only 19 months due to sluggish sales.
“We believe that we have the expertise in retail, entertainment and retail development to help Japanese companies retool themselves to be more cost-effective,” Miller, 56, said. ” And we can lower costs for Japanese consumers by bringing that expertise (to Japan).”
As an example of new types of retail, Miller cited the concept of “retail theme parks” that combine such facilities as shops, movie theaters, cafes and playgrounds for children, while retailers reach customers with new marketing tools such as the Internet.
The idea is a cross between Disneyland and a shopping center. “So you are providing a whole spectrum of retail business in a truly entertaining environment,” Miller said.
Facing a decline in sales over the past few years, the Japanese retail industry appears to follow what its American counterpart went through about a decade ago, Miller said.
In the United States, the department store industry went through difficulty in the 1970s and 1980s, when about 60 percent of department stores went out of business because they were not competitive, Miller said.
Similarly, many Japanese department stores will go through sea changes to be more productive to survive and, in that process, the Japanese industry must learn to decrease the steps between manufacturing and retail, Miller said.
Despite the stagnant economy, it is the right time to invest in and enter the Japanese market, the world’s second-largest retail market, Miller said, citing the growing tendency of Japanese consumers to look for bargains.
AMI plans to proceed with two types of development projects in Japan — the redevelopment of commercial buildings in urban areas and suburbs, as seen in the case of the Xsite project, and development projects for large-scale retail and entertainment malls.
In the large-scale projects, the firm plans to build commercial complexes for shopping centers, restaurants, leisure and entertainment at eight locations. Each of the planned complexes has around 200,000 sq. meters of space on one or two levels.
However, AMI’s first large-scale project plan in the country has hit a snag.