Business / Corporate

Japan's retailers gain as sales data hints at post-outbreak rebound

Bloomberg

Shares in a range of Japanese retailers have gained following a surge in sales at furniture chain Nitori Holdings Co. and casual fashion retailer Shimamura Co., an early indication of pent-up demand from local shoppers being unleashed as the threat from the coronavirus subsides.

Nitori same-store sales jumped 47 percent in June from the same month the previous year, the most on record in data going back to 2012, while Shimamura saw a 27 percent increase.

The two companies are early reporters of retail data, with the figures released Tuesday covering the period from May 21 to June 20. The coronavirus state of emergency was lifted in stages from May 14, before being fully ended on May 25.

The sales seen by Shimamura and Nitori have been echoed at other retailers set to report monthly data early in July, including United Arrows Ltd., Muji owner Ryohin Keikaku Co. and Uniqlo operator Fast Retailing Co.

Revenues at department stores, more dependent on tourist spending, fell 27 percent compared with the year earlier between June 1 and 17, Kyodo News reported, citing the Japan Department Stores Association. Should that pace hold, it would still represent a recovery from May, when sales dropped 66 percent nationwide according to data released Tuesday. Sales plunged 73 percent in April.

Nitori cited continued demand for home office furniture and storage goods, noting that 4.8 percentage points of the increase could be attributed to the fact that the period had one more Saturday compared with 2019.

The Sapporo-based firm had already seen relatively little impact on its revenue during the state of emergency, with sales jumping in March and falling just 4 percent in April. Its shares rose about 18 percent this year versus an 8 percent loss for the broader Topix. At Shimamura, by contrast, turnover fell every month in 2020, including a 28 percent drop in April. Its stock has fallen 3 percent year to date.

Consumers have taken to remote work in a way that few had predicted, with Nitori in particular standing to benefit from an increased level of spending as workers spruce up their living environments at home. A Jiji Press survey found that 70 percent want to continue working from home even after the pandemic is contained, while a Cabinet Office poll showed increased levels of interest from 25 percent of city dwellers in moving to the country.

Shimamura also said it saw continued “stay home” demand for relaxing interior clothing and summer goods, with June customer numbers up 16 percent from a year earlier. On Monday, infant goods retailer Nishimatsuya Chain Co., which had seen gains every month throughout the emergency, reported a 34 percent jump in sales.

Overall retail sales data for May is released on June 29. The print for April showed a 14 percent drop compared to the previous year, the second-largest decline in a single month since 1989.

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