Department store chains have entered a major realignment phase. The department stores realigned through the integration of their operations are expected to wage a fierce battle against their rivals to survive and grow in an industry whose total sales have been declining since the early 1990s. On Monday, the Daimaru and Matsuzakaya department stores started a new life under the umbrella of holding company J. Front Retailing. The holding company's sales of ¥1.17 trillion, based on 2006 business year figures, overtakes Takashimaya Co., a major department store chain, whose sales was ¥1.05 trillion.
In October, the Hankyu and Hanshin department stores will integrate their operations. In April 2008, the Mitsukoshi and Isetan department stores will start their partnership. Millennium Retailing, which has the Seibu and Sogo department stores, came under the wings of Seven & I Holdings last year.
In 1990, when Japan's economic bubble was at its peak, sales for the department store industry totaled almost ¥10 trillion. Annual sales are now around ¥7 trillion. Social and economic factors are behind the decline. The aging of the population and the declining birthrate, coupled with a prolonged economic recession, are pushing down consumption. Department stores also face competition from supermarkets, convenience stores, specialty stores and even Internet sales.