[Company analysis] J. Front Retailing Co., Ltd. (J.フロント リテイリング)

「J. Front Retailing Co., Ltd. (J.フロント リテイリング)」is a holding company who owns「Daimaru Matsuzakaya Department Stores Co., Ltd.(大丸松坂屋百貨店)」and「PARCO CO., LTD.(パルコ)」. In the department store industry, it has the second largest sales volume in Japan after「Isetan Mitsukoshi Holdings Ltd.(三越伊勢丹ホールディングス)」. The number of consolidated employees is approximately 6,871.

 

1. Company Profile

2. Summary and Features

3. Major Business

4. Financial Information

 

 

 

1. Company Profile

 

※Unit is JPY million, as of 2019

Company name	J. Front Retailing Co., Ltd.
Company name (Japanese)	J.フロント リテイリング
Date of establishment	Monday, September 3, 2007
Headquarters location	〒103-0027 東京都中央区日本橋一丁目4番1号
Capital	31,974
Consolidated sales	1,125,153
Consolidated operating profit	459,840
Consolidated total assets	1,029,573
Consolidated capital	468,485
Capital adequacy ratio	45.5%
Consolidated number of employees	6,871

 

 

 

2. Summary and Features

 
「J. Front Retailing」was established by business integration between two famous department store chain,「The Daimaru, Inc.(大丸)」and「Matsuzakaya Co., Ltd.(松坂屋)」. Both companies have very long coporate history that Daimaru has a history of about 300 years, and in Matsuzakaya's case has about 400 years. Recently, due to the influence of "Abenomics", the market has regained momentum temporarily, but the Japanese department store business has been shrinking from 1998, along with its market size.


In the 2000s, the Japanese department store industry was required to improve management efficiency due to the decrease in sales caused by population decline and changes in the distribution industry. In the case of the above business integration, both companies have a long history and「Daimaru」conducted business activity centering on Osaka meanwhile「Matsuzakaya」was centering on Nagoya, so there was little competition in the region. Therefore, the two companies decided that the advantages of the business integration outweigh the disadvantages. In March 2007, they agreed to a business integration, and「J. Front Retailing」was launched.

After this integration, they closed 4 Daimaru stores and 3 Matsuzakaya stores. Especially in the case of「Daimaru」, they had a large number of stores in Europe and Asian countries. But around 2000, they decided to close 7 stores in total. On March 1, 2010, the department store operating section of both companies were integrated and a new department store operating company,「Daimaru Matsuzakaya Department Stores Co., Ltd.(株式会社大丸松坂屋百貨店)」was opened.

As for the sales composition,「J. Front Retailing」is similar to a typical department store company, with clothes, bags, and hats accounting for 50% of the total. However, in cooperation with「Kajima Corporation(鹿島建設)」, which is famous for its skyscraper construction technology, they opened "GINZA SIX", the largest commercial facility in Ginza, in April 2017. In addition, they are trying to differentiate themselves from existing department stores, by expanding the fashion building “Parco” for young people.

 

 

 

3. Major Business

 

■ Department store business
They have 17 department stores in major cities throughout Japan.

■ Shopping center business
They are developing and operating 18 PARCO stores in Japan and are developing entertainment, business and new business such as "Zero Gate Business(small commercial facilities in urban areas)."

■ Trading business
Through "Daimaru Kogyo, Ltd.," which is in charge of the retail business, they supply chemicals, packaging materials, metal parts, construction materials, electronic parts, foods, etc. for the entire group. They have overseas offices in China, Taiwan, Thailand, Vietnam, Myanmar and Indonesia.

■ Construction / Interior Business
Through「J. Front Design & Construction Co. Ltd.」, which is in charge of the building materials business, they are engaged in interior design and construction specialized in high quality and high added value from general construction to public facilities. going.

■ IT system business
Focusing on the distribution industry, they conduct construction, proposal and development for information systems.

■ Product testing and quality control business
Through the "Consumer Science Research Center" that started from the dyeing test room and hygiene test room of the「Daimaru Department Store」, they are implementing a quality control business in the distribution industry.

 

 

 

4. Financial information

 

※Unit is JPY million

		2016	2017	2018
Consolidated sales		1,108,512	1,138,981	1,125,153
Consolidated operating profit		452,505	469,915	459,840
Consolidated total assets		1,005,069	1,022,348	1,029,573
Consolidated net assets		42,144	450,887	468,485
Breakdown of consolidated operating profits	Department store business	267,873	273,937	275,140
	Parco business	93,382	91,254	89,406
	Real estate business	4,523	12,761	15,826
	Credit・Financial business	5,448	5,881	6,361
	Others	81,278	86,080	73,105