BIG BOY: A giant department store group that will comprise the interests of Seibu and Sogo will emerge in June. Millennium Retailing Inc., a holding company, will be established June 1 and will control the 21-store Seibu Department Stores Ltd. and the 11-store Sogo Co., Shigeaki Wada, president of Sogo, who will head the group, announced in Tokyo last week. The new group will have combined sales of more than $8.8 billion, making it Japan’s second-largest department store group next to Takashimaya.
This story first appeared in the May 27, 2003 issue of WWD. Subscribe Today.
Seibu, which employs 6,200 people, posted sales of $5.05 billion last year. while Sogo, with 4,900 employees, reported sales of $3.8 billion.
Wada said the two department store chains under the holding company will share the same broad policy and strategy on merchandise, clientele, personnel and information system, but will operate separately. The combination is expected to generate synergy between the two chains, Wada said. — Tsukasa Furukawa
UNLUCKY 13: Sales of department stores in Japan fell yet again last month, declining 5 percent to $5.4 billion in April compared with a year ago, according to the Japan Department Stores Association. It was the 13th month in a row of decline in total sales at the nation’s 290 department stores. Apparel sales, which made up 42.2 percent of sales, dropped 5.1 percent to $2.3 billion dollars from a year ago. Sales of women’s wear dropped 5 percent to $1.5 billion, while men’s wear dropped 6.2 percent to $4.2 million dollars. Low temperatures and rain in the month contributed to the declines. All the figures were on a same-store basis and were converted from the yen at current exchange. — Koji Hirano
RIDING HIGH: Hong Kong’s textile shares have soared over the last two weeks as investors dump property and travel-related shares. Strong earnings reports coupled with potential growth in international markets has led to record highs for some stocks, including cotton fabric producer Fountain Set (Holdings.) Its price rose 11 percent a day after it announced a 90 percent rise in interim profits and has risen more than 50 percent since the beginning of the year. As of May 21, its stock price was 85 cents.
Fountain Set, which has a capacity of 6.6 million kilograms per month, is one of the world’s largest cotton textile producers. The company cited effective cost control measures and low expenses for its growth and also said that it had increased its stock of raw materials in anticipation of a price rise for Chinese cotton. The price of cotton by Mainland producers has been the subject of much speculation over the last two weeks. It rose to 13,600 yuan earlier this month, a 22.6 percent hike.
Other textile producers that have seen their stocks rise on Hong Kong’s Hang Seng Index include Texwinca Holdings, which rose over 13 percent to 83 cents a share; smaller producer Victory City International Holdings, which saw its stock price increase more than 68 percent, and Tungtex (Holdings), which rose 7.7 percent.
Analysts said that the phasing out of U.S. garment quotas by 2005 and the trend of American companies moving production to China have led to big growth opportunities for Hong Kong textile companies. — Constance Haisma-Kwok
COVIELLO’S COURSE: American designer James Coviello is entering the Japanese market through Itokin Co., which will introduce his line of women’s wear and accessories for fall-winter this year. The collection will include blouses, jackets, dresses and coats and will be both produced in Japan under license and directly imported, Itokin said. Accessory items will include hats, bags and scarves. Sales are expected to be 80 percent in licensed production and 20 percent in imports. For items to be produced here, prices will range from $133 to $217 for blouses and $408 to $658 for coats.
Itokin, which initially plans to sell the line through seven outlets, is targeting $29 million in sales in the third year of operation through 30 retail outlets, it is reported. Coviello was in Tokyo earlier this month to take a closer look at the Japanese fashion apparel market. — T.F.
MORE PRIVACY: A set of five privacy protection bills was approved this week at a full session of the Upper House and became law on May 23. Three of the five bills place tighter restrictions on handling personal information by private companies, public administrators and independent organizations. The remaining two bills call for a council to handle complaints of abuse of personal information and for working out related bills. However, “there will be no major damage to the direct marketing business here,” said a spokesperson for the Japan Direct Marketing Association. “Of course, direct marketers have to be more careful when they make use of the lists of consumers, but they can buy the lists and use them just like before.” When first presented to the Diet in March 2001, the legislation was met with howls of protest from the public and the press. Total annual sales through direct marketing in Japan were about $21.4 billion. — K.H.
TRADE THAIS: Thai export clothing manufacturers will hold a trade exhibition in Tokyo and then in Osaka in coming weeks under the sponsorship of the Thai Department of Export Promotion to further penetrate the Japanese market. Some 30 Thai manufacturers will show a range of Thai products using Thai cotton and Thai silk that will include hand-woven clothes, scarves and shawls, according to the Thai Trade Center, Osaka. The exhibition will take place in Tokyo on Thursday and Friday, moving to Osaka June 3-4.
In a collaborative project known as T3 Thai Tex Trend, Italian designer Marcello Massarente is working with about 20 Thai manufacturers participating in the program to develop new textiles, the Osaka-based Thai agency said.— T.F
TAKING OFF: “Astro Boy” of animation fame will be revived this fall in handkerchiefs and mini-towels to be marketed this summer by Kawabe Co. A Kawabe spokesman said a variety of designs targeting all ages will go on sale in July. Prices will range from $2.50 to $8.— T.F.
CHINA’S LATEST CHAPTER: Nomura Trading Co. is finalizing an agreement to establish a joint-venture company in China to produce and market jeans. A Nomura spokesman said the venture, to be named Ninbo Youngor Denim Jeans Wear Co., is expected to be formed later this month with initial capital of $2 million. Nomura will hold a 15 percent stake and the remainder will be financed by Ninbo-based Younger Group and the Hong Kong investment firm of Suntex Ltd. The executive said production is expected to be 1.5 million jeans in the first year of operation, with half sold in China through Youngor and the remainder exported to Japan, Europe, the U.S. and other overseas markets. — T.F.
SMOOTH ENTRY: Doko Shoji Co., a silk clothing manufacturer based in Kyoto, is moving into China to produce embroidered, hand-stitched and other types of hand-made silk and silk-blend women’s wear. A Doko spokesman said the company is establishing a wholly owned subsidiary, Xuridong Fashion Co., in Nantong, China, for the project.
Production will include shirts, blouses, pants and skirts using not only pure Chinese silk but silk-cotton, silk-linen and other blends, and pig suede, the executive said. Output in the first year of operation is expected to be 120,000 pieces, he added.
Production will be sold to Japanese clients, including department stores and specialty stores. The company, the executive said, is interested but has no immediate plans at this time to export to the U.S. or Europe. — T.F.