Moody’s Investors Service Inc. said Friday it has upgraded its senior unsecured rating on Isetan Co., a Tokyo-based department store chain, from Ba2 to Ba1, with the rating outlook being positive.

The upgrade reflects Isetan’s improving cash flow and earnings despite weak consumer spending and intensified competition in Japan’s retail industry, the U.S. credit rating agency said.

“Moody’s expects that Isetan will be an example of a Japanese department store company that succeeds at re-engineering its business processes, while it keeps earnings and cash flow stable over the medium term,” it said.

The agency said the latest rating action concludes the review initiated June 7.

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