EASTERN BLOCK: An official of the multilateral trade system department of the Ministry of Economy, Trade and Industry said the Japanese government is working on a plan to raise tariffs on some yet-to-be-decided U.S. imports to counter American import restrictions on steel products. The official noted, however, that nothing concrete has been decided.
This story first appeared in the November 25, 2003 issue of WWD. Subscribe Today.
The official said METI Minister Shoichi Nakagawa made a statement last week that the Japanese government will have to determine by the end of November a list of products on which tariffs will be raised if and when the U.S. decides not to withdraw its “safeguard” restrictions on steel imports.
Nakagawa’s statement “remains the official position of the Japanese government at this time,” the METI official said in response to an earlier report in the Japan Economic Journal that Tokyo is finalizing a plan to impose an extra duty of about five percent on imports of apparel, textiles, bags and leather goods, among others, in the event of a U.S. refusal to withdraw its safeguard restrictions on steel imports. — Tsukasa Furukawa
UP AND DOWN: Isetan reported a 19.8 percent decline in net profits to $20.1 million, or 2.21 billion yen, on a consolidated basis for the first half ended Sept. 30. Operating profits dropped 21.4 percent to $38.5 million, or 4.23 billion yen, while sales inched down 0.9 percent to $2.61 billion, or 287.04 billion yen, partly due to the cool summer, according to the retailer. Extraordinary losses during the period under review were $5.6 million, or 616 million yen, caused by adjustment of the social security payment. Apparel sales, which made up 47.9 percent of total sales inched down 1 percent to $1.1 billion (121.21 billion yen). Dollar figures were converted at current exchange rate.
Also, Isetan announced plans to liquidate two of its subsidiaries; Isetan GmbH in Austria due to a close of Isetan’s gift shop in Vienna, and Isetan Spain SA due to a sale of assets of its store.
For the fiscal year ending March 31, 2004, the department store projects net profits of $26.4 million (2.9 billion yen) and sales of $5.59 billion (615 billion yen).
Takashimaya’s first half, which ended Aug. 31, returned to the black with net profits of $152.7 million (16.80 billion yen) compared with net losses of $2 million (219 million yen) a year ago on a consolidated basis. The group reported a 0.9 percent drop in sales to $5.23 billion (575.02 billion yen), while the operating profits soared 103.8 percent to $97.4 million (10.71 billion yen) from $47.8 million (5.26 billion yen) during the same period a year ago. Takashimaya’s department store business generated sales of $4.25 billion (466.03 billion yen), 2.4 percent down from the previous year, while operating profits soared 359 percent to $53.9 million (5.93 billion yen) due to the restructuring to reduce the business costs, according to the retail group.
Mitsukoshi earned $18.7 million (2.06 billion yen) in net profits, 19.5 percent down from a year ago on a consolidated basis. Sales of the firm during the six-month period ended Aug. 31 dropped 1.8 percent to $4.06 billion (446.28 billion yen), while the operating profits dropped 13.1 percent to $36.5 million (4.01 billion yen). Its department store business generated sales of $3.87 billion (425.38 billion yen), 1.7 percent down from a year ago, while operating profits also dropped 1.0 percent to $35.2 million (3.87 billion yen). — Koji Hirano
DEEP RED: Kanebo announced net losses of $609.8 million (67.08 billion yen) on a consolidated basis for the first half ended Sept. 30, compared with net profits last year of $1.2 million (135 million yen).
“Due to the cool summer and worries against a slowdown of exporting business (in general) because of the appreciation of the yen, business circumstances were very severe,” said the group.
Operating losses in the period under review were $66.4 million (7.3 billion yen) compared with last year’s operating profits of $118.9 million (13.08 billion yen). Sales dropped 13.9 percent to $2.04 billion (224.72 billion yen). Dollar figures were converted at current exchange.
Cost of goods sold dropped 10.9 percent during the first six months compared with the same period a year earlier, but selling, general and administrative costs fell only 1.1 percent. Extraordinary losses during the period were $365.4 million (40.19 billion yen), including $333.4 million (36.67 billion yen) for restructuring costs.
Cosmetics sales, which made up 43.5 percent of entire revenues, dropped 8.2 percent to $888.6 million (97.75 billion yen) because of increased competition and price deflation, said the group.
For the full year ending March 31, 2004, Kanebo projects net profits of $9.1 million (1 billion yen) and sales of $4.23 billion (465 billion yen) on a consolidated basis. — K.H.