Executive Director, Metrical Inc

Aki Matsumoto

Executive Director

Independent Leading Corporate Governance Research

Metrical Inc

METRICAL INC. is an independent leading Corporate Governance research firm in Japan where Corporate Governance is increasingly recognized as an important element on corporate management in these days. Thus, CG research and solutions would become an essential component of global capital markets and play important to contribute to transparency of the markets and maximize shareholders’ value in Japan. 

METRICAL INC. provides Corporate Governance research and analysis including rating services, and  also offers investment research and IR services with solutions and customized profound research on CG and IR issues.

<ul>
<li>On January 14, I attended a business strategy briefing of CanDo. This was the first business briefing after AEON (8267) consolidated CanDo.</li>
<li>While CanDo's sales are expected to increase mainly through consignment sales, profit margin will improve due to cost reduction, and the key will be to expand sales of attractive products.</li>
<li>Since the management framework has changed by joining AEON, the corporate governance will be paid attention whether this change will be good for the sustainable growth of the corporate value.</li>
</ul>


On January 14, I attended a business strategy briefing of CanDo. This was the first business briefing after AEON (8267) consolidated CanDo.
While CanDo's sales are expected to increase mainly through consignment sales, profit margin will improve due to cost reduction, and the key will be to expand sales of attractive products.
Since the management framework has changed by joining AEON, the corporate governance will be paid attention whether this change will be good for the sustainable growth of the corporate value.


Japan's Governance: CanDo (2698) Business Strategy Meeting

Expert on Japan Retail and Consumer Markets, JapanConsuming

Michael Causton

Expert on Japan Retail and Consumer Markets

Real Insight on Japanese Consumer Markets

JapanConsuming

JapanConsuming is a specialist research firm producing intelligence on Japanese retail and consumer markets. Founded in 2000, JapanConsuming has become the leading provider of insights on Japanese retailers and consumer trends to retailers, brands, government agencies and investors. As well as a highly regarded monthly report on the market, JapanConsuming produces in-depth reports on retail sectors, seminars on key trends and telephone consulting to investors on trends and retailers.

JapanConsuming was founded by Michael Causton and Roy Larke. 

Equity Bottom-Up

PAL GROUP Holdings Co., Ltd. / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/pal-group-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:2633:1" rel="noopener">PAL GROUP Holdings Co., Ltd. (2726 JP)</a> is mostly a fashion retailer but two decades ago created a new discount variety chain called 3Coins. </li>
<li>3Coins has been one of the best performing retailers during the pandemic, building up a loyal following thanks to its diverse range of popular products.</li>
<li>Sales tripled in the decade to last year but look set to increase a further 25% this year alone.</li>
</ul>



PAL GROUP Holdings Co., Ltd. (2726 JP) is mostly a fashion retailer but two decades ago created a new discount variety chain called 3Coins. 
3Coins has been one of the best performing retailers during the pandemic, building up a loyal following thanks to its diverse range of popular products.
Sales tripled in the decade to last year but look set to increase a further 25% this year alone.


3Coins Proves a Hit in Pandemic and Moves into Food

Event-Driven

<ul>
<li>Aeon is on the acquisition trail again and not only in the drugstore sector through its <a href="https://www.smartkarma.com/entities/welcia-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20895:1" rel="noopener">Welcia Holdings (3141 JP)</a> subsidiary.</li>
<li>Japan's biggest retailer also consolidated its hold on the island of Shikoku by increasing its stake in Fuji and will now own more than 20% of all retail sales.</li>
<li>Signalling its ambitions to carve out a large share of the discount market, Aeon also acquired the 100 YEN retailer, <a href="https://www.smartkarma.com/entities/can-do-co-ltd" target="_blank" data-smartkarma-citation="entities:6879:1" rel="noopener">Can Do Co Ltd (2698 JP).</a>
</li>
</ul>


Aeon is on the acquisition trail again and not only in the drugstore sector through its Welcia Holdings (3141 JP) subsidiary.
Japan's biggest retailer also consolidated its hold on the island of Shikoku by increasing its stake in Fuji and will now own more than 20% of all retail sales.
Signalling its ambitions to carve out a large share of the discount market, Aeon also acquired the 100 YEN retailer, Can Do Co Ltd (2698 JP).



Aeon Consolidates Through Fuji and Steps up Discounting Via Can Do

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<a href="https://www.smartkarma.com/entities/aeon-co-ltd" target="_blank" data-smartkarma-citation="entities:3:1" rel="noopener">Aeon Co Ltd (8267 JP)</a> has reached a deal with the majority owners of <a href="https://www.smartkarma.com/entities/can-do-co-ltd" target="_blank" data-smartkarma-citation="entities:6879:1" rel="noopener">Can Do Co Ltd (2698 JP)</a> to buy a majority stake in the company through two separate tender offers at two different prices. Can Do Co finds new store acquisition to be very challenging and is experiencing a rise in procurement costs. Under these circumstances, by becoming a consolidated subsidiary of Aeon, they believe better utilisation of scale and management resources could help the company survive in this competitive environment. The first tender offer can be thought of as an Unconditional Partial Offer at ¥2,700/share. The second as a full tender offer at ¥2,300/share.<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/235/449/original/Screenshot+2021-10-16+at+12.17.16+PM.png?1634361665" class="editor-image img-responsive" data-smartkarma-image-id="235449"></figure>The details of the deal are interesting, and have unusual implications for the event itself and for the situation post-tender. </section>

Aeon Co Ltd (8267 JP) has reached a deal with the majority owners of Can Do Co Ltd (2698 JP) to buy a majority stake in the company through two separate tender offers at two different prices. Can Do Co finds new store acquisition to be very challenging and is experiencing a rise in procurement costs. Under these circumstances, by becoming a consolidated subsidiary of Aeon, they believe better utilisation of scale and management resources could help the company survive in this competitive environment. The first tender offer can be thought of as an Unconditional Partial Offer at ¥2,700/share. The second as a full tender offer at ¥2,300/share.The details of the deal are interesting, and have unusual implications for the event itself and for the situation post-tender. 

Can Do (2698 JP) Does... The Funky Two Step Tender

<a href="https://www.smartkarma.com/entities/12989" target="_blank" data-smartkarma-citation="entities:12989:1">Seria (2782 JP)</a> remains a robust 100 Yen shop business with one of the most disciplined store management systems in the business and an ever-expanding store portfolio.However, it faces problems, notably the labour shortage and higher wages, leading to lower operating profit.At the same time, same-store sales growth has palled in the last 18 months.These are hard issues to solve, especially for a retail model that depends on fixed, low prices. One of the solutions the sector is trying out is switching from a 100 Yen model to a variable fixed price model with ranges at ¥300 and above.While Seria has been the most disciplined retailer in the 100 Yen sector until now, its competitors are finally catching up, including Daiso Sangyo, which has triple the number of stores.

Seria (2782 JP) remains a robust 100 Yen shop business with one of the most disciplined store management systems in the business and an ever-expanding store portfolio.However, it faces problems, notably the labour shortage and higher wages, leading to lower operating profit.At the same time, same-store sales growth has palled in the last 18 months.These are hard issues to solve, especially for a retail model that depends on fixed, low prices. One of the solutions the sector is trying out is switching from a 100 Yen model to a variable fixed price model with ranges at ¥300 and above.While Seria has been the most disciplined retailer in the 100 Yen sector until now, its competitors are finally catching up, including Daiso Sangyo, which has triple the number of stores.

Japan

CAN DO CO., LTD. operates 100 Yen shop retail stores.  The Company also wholesales merchandises to franchise stores.  Can Do's product lines include household goods and dry foods.

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Can Do Co Ltd (2698 JP)

Japan's Governance: CanDo (2698) Business Strategy Meeting

I attended a business strategy briefing of CanDo on January 14, and this article will discuss the outlook for business expansion and the corporate...

Metrical Inc

3Coins Proves a Hit in Pandemic and Moves into Food

Discount retail is booming in Japan and one of the winners is 3Coins, operated by fashion firm, Pal Group. While Pal suffers negatively from the...

Michael Causton

Aeon Consolidates Through Fuji and Steps up Discounting Via Can Do

Aeon continues to consolidate retail share. Its acquisition of Fuji will give it 20% share of all retail sales in Shikoku while its purchase of Can...

Michael Causton

Can Do (2698 JP) Does... The Funky Two Step Tender

Aeon is taking control of 100 yen shop Can Do (2698), buying out the family to get to 51%. It is being done through two tender offers at different...

Travis Lundy

Slower Growth at Seria

Seria (2782 JP) remains a robust 100 Yen shop business with one of the most disciplined store management systems in the business and an...

Michael Causton

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