Isetan Mitsukoshi Holdings Ltd. said Thursday it will shut down six unprofitable stores by spring in an effort to restructure itself for the slowing economy.
The closings will be the first since Mitsukoshi Ltd. and Isetan Co. merged to launch a holding company in April that became Japan's largest department store operator.
The six Mitsukoshi stores to shut down include the one in Ikebukuro, Tokyo, as well as regional branches in Kagoshima and Miyagi prefectures.
With the decision, the company said it hopes to achieve its target of logging a group operating profit of ¥75 billion in the 2013 business year, which would mark an all-time high for the department store industry.
"We decided it was necessary to further strengthen our structural reforms and financial basis" amid a harsh environment, Isetan Mitsukoshi said in a statement.
"Store closures aren't a surprise given Mitsukoshi's performance and the severe business environment," Koichiro Ogawa, a Tokyo-based analyst at CSK Group, said. "The focus for all department-store retailers is to keep costs under control."
Hit by lagging consumer consumption and the economic downturn, competitors have also been retrenching.
J. Front Retailing Co., the operator of the Daimaru and Matsuzakaya department store chains, has been forced to shut down its store in Imabari, Ehime Prefecture, by the end of the year.
Department store sales fell 3.1 percent in August from a year earlier on a same-store basis, down for the sixth straight month, according to data released last week by the Japan Department Stores Association.
Isetan Mitsukoshi's move is likely to accelerate the closure of more department stores, particularly outside the big cities, analysts said.
