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

<ul>
<li>Although spending on non-necessities withered from March 2020 onwards, some low-cost retailers of discretionary items continued to grow. </li>
<li>Workman’s mix of high cost performance and engagement with the ever more active outdoor market has, and will, support expansion, even if same-store sales growth has slowed.</li>
<li>Future category expansion will deliver higher same-store sales as well as top line growth. 1,500 stores (from 1,000) is certain but 2,000 is possible thanks to new categories like footwear.</li>
</ul>


Although spending on non-necessities withered from March 2020 onwards, some low-cost retailers of discretionary items continued to grow. 
Workman’s mix of high cost performance and engagement with the ever more active outdoor market has, and will, support expansion, even if same-store sales growth has slowed.
Future category expansion will deliver higher same-store sales as well as top line growth. 1,500 stores (from 1,000) is certain but 2,000 is possible thanks to new categories like footwear.


2023 High Conviction: Workman's Cost Performance Will Beat the Competition

<ul>
<li>Decathlon entered the Japanese retail market in 2017 with the opportunity to take a significant share of a growing sports and athleisure sector.</li>
<li>But the French firm is already retreating: it will close its two stores and focus on online and wholesaling. </li>
<li>The market is poorer for but it does leave the market wide open for Workman – which built a consumer chain to combat Decathlon – to become dominant.</li>
</ul>


Decathlon entered the Japanese retail market in 2017 with the opportunity to take a significant share of a growing sports and athleisure sector.
But the French firm is already retreating: it will close its two stores and focus on online and wholesaling. 
The market is poorer for but it does leave the market wide open for Workman – which built a consumer chain to combat Decathlon – to become dominant.


Workman Wins as Decathlon Closes Japan Stores

<ul>
<li>Workman sees an opportunity to disrupt the footwear market by creating Japan’s first national low price chain, with a strong focus on women’s shoes.</li>
<li>It launched the first store this month with prices as low as ¥680 and expects to have 200 stores in the near future.</li>
<li>The Japanese footwear market is ripe for disruption as <a href="https://www.smartkarma.com/entities/abc-mart-inc" target="_blank" data-smartkarma-citation="entities:3213:1" rel="noopener">Abc Mart Inc (2670 JP)</a> diversifies and <a href="https://www.smartkarma.com/entities/chiyoda-co-ltd" target="_blank" data-smartkarma-citation="entities:6461:1" rel="noopener">Chiyoda Co Ltd (8185 JP)</a> and <a href="https://www.smartkarma.com/entities/gfoot-co-ltd" target="_blank" data-smartkarma-citation="entities:10237:1" rel="noopener">Gfoot Co Ltd (2686 JP)</a> struggle to maintain momentum.</li>
</ul>


Workman sees an opportunity to disrupt the footwear market by creating Japan’s first national low price chain, with a strong focus on women’s shoes.
It launched the first store this month with prices as low as ¥680 and expects to have 200 stores in the near future.
The Japanese footwear market is ripe for disruption as Abc Mart Inc (2670 JP) diversifies and Chiyoda Co Ltd (8185 JP) and Gfoot Co Ltd (2686 JP) struggle to maintain momentum.


Workman to Disrupt Footwear Market with ¥60 Billion Sales Target

Index Rebal/Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal/Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

<ul>
<li>The Tokyo Stock Exchange (TSE) calculates Free-Float Weight (FFW) for each listed company and uses this value as a key component of TOPIX Index Calculation. </li>
<li>For companies with "low liquidity" the FFW will be multiplied by a fixed liquidity factor of 0.75 to derive the final FFW used for index calculation. </li>
<li>Every April, the application of this liquidity factor is reviewed by the TSE for all TSE1 constituents. This situation opens up interesting opportunities for a basket trade. </li>
</ul>


The Tokyo Stock Exchange (TSE) calculates Free-Float Weight (FFW) for each listed company and uses this value as a key component of TOPIX Index Calculation. 
For companies with "low liquidity" the FFW will be multiplied by a fixed liquidity factor of 0.75 to derive the final FFW used for index calculation. 
Every April, the application of this liquidity factor is reviewed by the TSE for all TSE1 constituents. This situation opens up interesting opportunities for a basket trade. 


TOPIX Index Upweights: The Big April Basket 2022 (Pre-Event)

Japan

GFOOT CO., LTD. operates a shoe store chain in mainly in Aichi Prefecture, and Tokyo, Kanagawa, and Saitama Prefectures.  The Company sells shoes for men, women and children, sports shoes, and rain shoes.

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Gfoot Co Ltd (2686 JP)

2023 High Conviction: Workman's Cost Performance Will Beat the Competition

Some analysts have dismissed Workman as past its peak because S-S sales have fallen. This is a mistake: top line expansion and income growth will...

Michael Causton

Workman Wins as Decathlon Closes Japan Stores

Workman has won the battle for Japan's low price sports and outdoor market. Decathlon is in retreat and no other retailer comes close on cost...

Michael Causton

Workman to Disrupt Footwear Market with ¥60 Billion Sales Target

Some analysts write off Workman as a past growth story. This is a mistake. It remains one of the strongest discount lifestyle retailers and has...

Michael Causton

TOPIX Index Upweights: The Big April Basket 2022 (Pre-Event)

Every April, the application of this liquidity factor is reviewed by the TSE for all TSE1 constituents. This situation opens up interesting...

Janaghan Jeyakumar, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)