By Kelly Wetherille
with contributions from Amanda Kaiser
 on January 5, 2017
A Uniqlo store in Shinjuku, Tokyo

TOKYO — Retailers in Japan saw mixed sales in December, with lower-priced store chains suffering from unseasonably warm weather and some department stores benefiting from a weak yen and increased tax-free sales to international tourists.

Fast Retailing said Thursday that same-store sales among its Uniqlo outlets in Japan decreased by 5 percent last month. Customer numbers were down 4 percent, while the average purchase per customer slipped by 1 percent.

“Same-store sales declined year-on-year in December after warm weather in the latter part of the month dampened sales of core winter items,” the retailer said.

Not having opened or closed any stores in December, Fast Retailing currently counts 800 Uniqlo stores in Japan.

Shimamura, another cut-price fashion retailer, said its sales contracted by 4.4 percent year-on-year last month. Customer numbers were down 2.6 percent, while the average purchase per customer was 1.8 percent lower. After opening four stores in December, Shimamura currently has 1,365 doors in Japan.

Isetan Mitsukoshi Holdings said sales from its nine department stores in the Tokyo metropolitan area declined 1.9 percent on the year last month. Of those stores, the only one that saw a sales increase was the Isetan flagship in Tokyo’s Shinjuku district, where sales were up just 0.1 percent. The largest individual decrease came from the store in suburban Fuchu, where sales dropped 18.3 percent.

Takashimaya saw a December sales increase of 0.5 percent among its 17 stores in Japan. Urban stores fared better, with sales at the retailer’s Osaka location gaining 5.4 percent on the year. Meanwhile, one store in a more rural location saw its sales drop by 15.1 percent.

“Thanks to the effects of a weak yen and high stock prices, tax-free sales and sales of big-ticket items grew favorably in December, leading to the second consecutive month of year-on-year sales increases,” Takashimaya said.

H2O Retailing, which operates the Hankyu and Hanshin chains of department stores, said sales among those stores in Japan were up 1.3 percent in December. It was the first yearly growth in sales the retailer has seen since July.

J. Front Retailing said sales at its 18 Daimaru and Matsuzakaya department stores in Japan contracted by 2.3 percent on the year last month. Sales at the Daimaru store in Tokyo were up 2.6 percent compared with December 2015, but the Daimaru store in Osaka’s Shinsaibashi district saw sales drop 17.3 percent due to reconstruction work that has reduced the size of its sales floor by about 40 percent.

“Owing to reconstruction work on the main building of the Shinsaibashi store that has resulted in a reduction of its sales area, December sales in our department store business declined compared with last year,” J. Front said. “The movement of women’s coats, which was favorable in the previous month, was slow, but luxury-brand goods sold well. Cosmetics also saw double-digit sales growth over the previous year, and sales of men’s wear grew thanks in part to the continuing positive effects of a remodeling of the men’s sales floor at the Nagoya store.”

Nomura analyst Masafumi Shoda said she expects Japanese department stores to show a “clear improvement” through the spring.

“If equity prices continue at current levels, the Nikkei 225 will be higher than year-earlier levels from the start of 2017, and we think signs of improvement will grow in department store sales in the run-up to spring 2017,” Shoda wrote in a research report.

The analyst noted the positive impact of new business plans in the works at Isetan Mitsukoshi, Takashimaya and J. Front Retailing as well as retailers’ moves to cut costs and update their stores. “We look for a turn to profit growth in the industry from [full-year 2017] as the effects of sales declines fade and as management efforts yield results.”