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Department store chain Mitsukoshi Ltd. said Thursday it will close 10 unprofitable outlets across the country in 2005 in an effort to boost profitability amid weak sales.

Four large stores — two in Osaka Prefecture and one each in Yokohama and Kurashiki, Okayama Prefecture — will be closed in May, while six small outlets, including one at Tokyo’s Haneda airport, will be closed in February, the company said.

With the closures, the firm will ask for the voluntary early retirement of 800 workers over 40 years old. The remaining employees will be transferred to other locations.

“Sales (at these stores) have not been able to reach targets,” Mitsukoshi President Taneo Nakamura said at a news conference.

“The department store industry has been suffering negative revenue growth for six years in a row, and we have to build a strong business base to stay competitive.”

The company will book a 20.4 billion yen charge for the store closures and the early retirement call. It now expects a 2.5 billion yen net loss for its current business year to February, against an earlier projected net profit of 7.5 billion yen.

The firm said the four large stores have been in the red for years, with the Osaka stores not turning profits for at least 30 years.

Nakamura said the firm hopes to improve profitability by shutting down the problem stores and bolstering sales at the remaining outlets.

Mitsukoshi dates back to 1673, when it opened as a kimono shop in Tokyo. This year marks its 100th anniversary since becoming Japan’s first department store in 1904.

The Osaka city store to be closed was also opened as a kimono shop in 1691 and is Mitsukoshi’s second-oldest store.

While the four large department stores account for less than 10 percent of the chain’s total revenue, losing its outlets in big cities like Osaka and Yokohama is a major setback for Mitsukoshi.

Nakamura said the chain hopes to return to Osaka and Yokohama in the future but did not speak of any specific plans.

With the closures, the chain will be left with 15 large stores. Its flagship Nihonbashi store in Tokyo accounts for more than 30 percent of Mitsukoshi’s total revenue.

Like most of its rivals, Mitsukoshi has suffered from declining sales and is trying to lure back customers with large-scale store refurbishments.

Nakamura attributed the department store chain’s struggles to increasing competition from other retailers, including specialty and discount stores, which are more attuned to consumer needs.

“Mitsukoshi has not been able to catch up with changes in people’s lifestyles,” he said.

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