The new Isetan floor.

TOKYO Isetan Mitsukoshi Holdings, Japan’s largest department store operator, said Friday that its nine-month net profit plummeted 68.7 percent due to a high comparative base on tax benefits and extraordinary gains from a year ago.
The company, which manages the Isetan and Mitsukoshi chains of department stores, posted a nine-month net profit of 17.56 billion yen, or $219.64 million at average exchange rates for the nine months ended Dec. 31.
Operating profit fared better, dropping 2.8 percent to 24.12 billion yen, or $301.75 million.
The retailer said its net sales for the period dropped 1.4 percent to 919.67 billion yen, or $11.51 billion.


RELATED CONTENT: See More Earnings Coverage Here >>

“With the regularization of public investment accompanying [the March 11, 2011 earthquake] reconstruction as a background, we were able to see a slow economic turnaround. However…worries related to the consumption tax increase and a hike in electricity charges, as well as international concerns such as the debt crisis in Europe and the economic slowdown in China, mean that the future remains uncertain both in Japan and around the world,” the retailer said.

As part of a larger strategy to spruce up its three key stores in Tokyo, the company is currently in the midst of a large-scale renovation to its Isetan flagship store in Shinjuku. Since last spring, sections of the store have been closed to allow for rolling remodeling work. Since then, some sections have reopened, and a grand opening is planned for early March.
While ongoing renovations had an impact on sales at the Shinjuku store, Isetan Mitsukoshi said that sales at many stores across the country fell below levels of the same period the previous year.
Throughout the current fiscal year, the retailer has shifted some of its focus from traditional department stores to smaller format specialty stores, such as a travel-themed store targeting male business travelers passing through Tokyo’s Haneda Airport and a series of beauty stores called Isetan Mirror.
In a separate release on Friday, the company announced that it will open two more Isetan Mirror doors in Yokohama and Kitasenju, on the outskirts of Tokyo. Both stores will open on March 12, and will bring the total number of Isetan Mirror locations to five. The company will also be launching its own line of makeup, called Isetan Mirror Beauté, to coincide with the opening of the two stores.
Isetan Mitsukoshi left unchanged its guidance for the fiscal year ending March 31.

The company expects full-year net profit to decrease by 22 percent to 30 billion yen, or $320.65 million at current exchange rates.
The company forecasts operating profit will grow 4.9 percent to 25 billion yen, or $267.21 million, and sales will slip 0.5 percent to 1.23 trillion yen, or $13.19 billion.