TOKYO — Isetan Mitsukoshi Holdings Co. Ltd. posted an operating loss in the first half of the year as Japanese consumers continue to rein in spending.
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Net profit for the six months ended Sept. 30 dropped 65.9 percent to 4.16 billion yen, or $43.5 million at average exchange rates for the period, the retailer said Monday.
Operating losses totaled 425 million yen, or $4.4 million, from last year’s operating profit of 11.2 billion yen, or $117.4 million. Sales for the period dropped 12.5 percent to 617.1 billion yen, or $6.46 billion.
The retailer said despite some indications Japan’s economy has hit bottom, it has not seen a recovery in terms of consumption.
“More intense competition and consumers’ growing awareness of low-priced items hit the whole department store industry,” the company said.
To that end, Isetan Mitsukoshi, like other department stores, is closing some units and streamlining its distribution networks. The group closed two Mitsukoshi stores in May and plans to shutter another 11 Mitsukoshi stores and an Isetan store by the end of its current fiscal year, which ends March 31.
The company said it plans to book an extraordinary gain this year when it sells the building housing its former Mitsukoshi Ikebukuro store in Tokyo.
The company did not specify how much it expects the real estate transaction to generate but it did state it expects to more than treble its full-year net profit to 20 billion yen, or about $222.6 million at current rates.
The company said it expects its full-year operating profits to drop 89.8 percent to 2 billion yen, or $22.3 million. Sales are seen sliding 8.9 percent to 1.3 trillion yen, or $14.5 billion.