[Company analysis] Isetan Mitsukoshi Holdings Ltd. (三越伊勢丹ホールディングス)

 

「Isetan Mitsukoshi Holdings Ltd. (三越伊勢丹ホールディングス)」owns department stores around Japan, including「Isetan Mitsukoshi」. It has the largest sales volume in Japanese department store industry. As we can see from its name, this company was established by business integration in 2008 between「Mitsukoshi(三越)」which had the 4th largest sales in Japan and「Isetan(伊勢丹)」which had the 5th largest sales in Japan. The number of consolidated employees is approximately 24,000.

 

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	Isetan Mitsukoshi Holdings Ltd.
Company name (Japanese)	三越伊勢丹ホールディングス
Date of establishment	Tuesday, April 1, 2008
Headquarters location	〒160-0022 東京都新宿区新宿五丁目16番10号
Capital	50,600
Consolidated sales	1,196,803
Consolidated operating profit	29,229
Consolidated total assets	1,247,427
Consolidated capital	585,715
Capital adequacy ratio	47.0%
Consolidated number of employees	24,000

 

 

 

2. Summary and Features

 
In the 1980s after the collapse of bubble economy in Japan,「Isetan」which is the growing company with unique marketing technics decided to purchase「Mitsukoshi」, the oldest department store in Japan, in 2008. 「Mitsukoshi」has a history of 300 years, meanwhile「Isetan」has a history of nearly 130 years. This business integration was implemented in april of 2008.

Up the time of the merger, the two companies had different corporate cultures. but there was one thing they could share was, both company has many people from Keio University, and they had an influence within the organization. Immediately after the business integration, 「Isetan Mitsukoshi」became the largest Japanese department store in terms of sales scale, and they are still maintaining that position. At present, they opened store in almost all Government-designated city in Japan, and even they are expanding their business to overseas. 

As for the sales composition of「Isetan Mitsukoshi」, about 90% is from the department store business. In particular, their main stores are Shinjuku, Nihonbashi, and Ginza, and these three stores alone account for about 80% of total sales. In addition, they are also operating a high-end supermarket called “Queen's Isetan” centering on the Tokyo metropolitan area, leveraging the brand power that they have accumulated in our department store business.

The characteristic part is, 「Isetan Mitsukoshi」has the largest number of overseas stores(34 stores) among Japanese department store companies. In particular, they are focusing on expansion in Southeast Asia and China. In foreign countries, thepopulation growth and economic development still continue, and the department store business itself is also expanding. For this, this company is increasing the number of stores overseas.

On the other hand, in Japan, the market scale of the department store industry continued to shrink from 1998, due to the emergence of "Fast Fashion", which sells fashion-sensitive clothing at low prices, and the growth of online shopping. The current situation is very serious, even in 2017, the president of「Isetan Mitsukoshi」resigned with taking  responsibility for the earlest business result and the decision to reduce 5 stores in Japan.

 

 

 

3. Major Business

 

■ Department store business
This is the core business of「Isetan Mitsukoshi」, which accounts for about 90% of total sales. They have 22 stores in Japan from Hokkaido to Kyushu, and 34 stores overseas, mainly in China and Southeast Asia.

■ Credit / Financial business
They carry out credit / financial business through「MICARD Co., Ltd.,」a credit card company of theIsetan Mitsukoshi Group.

■ Real estate business
They carry out store redevelopment and commercial real estate business from a long-term perspective. They also manage tenants and carry out building exterior and design projects.

 

 

 

4. Financial information

 

※Unit is JPY million

		2016	2017	2018
Consolidated sales		1,253,457	1,256,386	1,196,803
Consolidated operating profit		23,935	24,413	29,229
Consolidated total assets		1,312,074	1,284,208	1,247,427
Consolidated net assets		579,782	588,091	585,715
Breakdown of sales	Department store business	1,149,932	1,129,478	1,108,536
	Credit・Financial business	20,380	21,656	22,458
	Retail・Specialty store business	42,878	0	0
	Real estate business	25,588	27,708	31,258
	Others	14,678	77,541	34,550