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. 

Event-Driven

<p><a href="https://www.smartkarma.com/entities/j-front-retailing-co-ltd" target="_blank" data-smartkarma-citation="entities:8947:1" rel="noopener">J Front Retailing (3086 JP)</a> has been busy with rebuilding and remodelling, culminating in November with the reopening of Parco Shibuya, as it shifts from department store dependence to become a mixed format developer.</p>
<p>This should ensure a bright future – and why it has just announced the purchase of all remaining shares in <a href="https://www.smartkarma.com/entities/parco-co-ltd" target="_blank" data-smartkarma-citation="entities:8431:1" rel="noopener">Parco Co Ltd (8251 JP)</a>.</p>
<p>The deal will help J Front continue to use Parco's expertise in management of its own buildings while J Front's access to funds will further Parco's revitalisation after two decades of under-investment under previous owners.</p>

J Front Retailing (3086 JP) has been busy with rebuilding and remodelling, culminating in November with the reopening of Parco Shibuya, as it shifts from department store dependence to become a mixed format developer.
This should ensure a bright future – and why it has just announced the purchase of all remaining shares in Parco Co Ltd (8251 JP).
The deal will help J Front continue to use Parco's expertise in management of its own buildings while J Front's access to funds will further Parco's revitalisation after two decades of under-investment under previous owners.

J Front Accelerates Diversification Plan with Parco Share Purchase

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<p>In a long-awaited move, today <a href="https://www.smartkarma.com/entities/j-front-retailing-co-ltd" target="_blank" data-smartkarma-citation="entities:8947:1" rel="noopener">J Front Retailing (3086 JP)</a> announced that it would buy out minorities in subsidiary <a href="https://www.smartkarma.com/entities/parco-co-ltd" target="_blank" data-smartkarma-citation="entities:8431:1" rel="noopener">PARCO Co Ltd (8251 JP)</a>. </p><p>PARCO started in the late 1950s as the Ikebukuro Station Building Company and only in late 1969 did it shut down its existence as Tokyo Marubutsu and open the first Parco store atop Ikebukuro Station. From 1973 to the mid 1980s the company opened more than a dozen new stores, starting in Shibuya - where it is still most famous - and moving to other places in Tokyo and in regional cities around Japan. The company continued opening new stores at a reasonably steady pace of one every few years until 2016 when the company announced the temporary closure of the Shibuya Parco store for redevelopment, and followed that with a couple other store closures in Otsu (opened 1976), Chiba (opened 1996), and Utsunomiya (1997).</p><p>The Shibuya PARCO re-opened on 22 November 2019 and averaged close to $3mm of revenue/day for the first ten days.</p><h2>The New News</h2><p>PARCO announced earnings to 30 November 2019 on Christmas Day, and on the next day J Front Retailing announced its takeover of Parco at ¥1850/share, which is a 34.3% premium to last (after nine straight months of stock price gains) and an all-time high price as far as I can tell. </p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/112/019/original/Screenshot%202019-12-26%20at%204.18.27%20PM.png?1577348338" class="editor-image img-responsive" data-smartkarma-image-id="112019"></figure><div class="content-caption">source: tradingview.com, Quiddity</div><div class="content-caption"></div><p>This is not a surprise, and the results of a successful tender offer and minority squeezeout are a foregone conclusion because the minimum threshold for success is that 1.7% of shares outstanding tender, but 17.6% of shares have agreed to tender. </p><p>This should trade tight. More below.</p>

In a long-awaited move, today J Front Retailing (3086 JP) announced that it would buy out minorities in subsidiary PARCO Co Ltd (8251 JP). PARCO started in the late 1950s as the Ikebukuro Station Building Company and only in late 1969 did it shut down its existence as Tokyo Marubutsu and open the first Parco store atop Ikebukuro Station. From 1973 to the mid 1980s the company opened more than a dozen new stores, starting in Shibuya - where it is still most famous - and moving to other places in Tokyo and in regional cities around Japan. The company continued opening new stores at a reasonably steady pace of one every few years until 2016 when the company announced the temporary closure of the Shibuya Parco store for redevelopment, and followed that with a couple other store closures in Otsu (opened 1976), Chiba (opened 1996), and Utsunomiya (1997).The Shibuya PARCO re-opened on 22 November 2019 and averaged close to $3mm of revenue/day for the first ten days.The New NewsPARCO announced earnings to 30 November 2019 on Christmas Day, and on the next day J Front Retailing announced its takeover of Parco at ¥1850/share, which is a 34.3% premium to last (after nine straight months of stock price gains) and an all-time high price as far as I can tell. source: tradingview.com, QuiddityThis is not a surprise, and the results of a successful tender offer and minority squeezeout are a foregone conclusion because the minimum threshold for success is that 1.7% of shares outstanding tender, but 17.6% of shares have agreed to tender. This should trade tight. More below.

J Front Retailing to Buy Out PARCO (8251)

Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/j-front-retailing-co-ltd" target="_blank" data-smartkarma-citation="entities:8947:1" rel="noopener">J Front Retailing (3086 JP)</a> is one of the few Japanese department store-centred retail groups that is not only willing to invest in new and upgraded facilities but, so far, is investing intelligently and with a clear understanding of who it is targeting.</p>
<p>Even so, the upcoming Parco Shibuya and Daimaru Shinsaibashi buildings come with a lot of new ideas that will make or break its reputation.</p>

J Front Retailing (3086 JP) is one of the few Japanese department store-centred retail groups that is not only willing to invest in new and upgraded facilities but, so far, is investing intelligently and with a clear understanding of who it is targeting.
Even so, the upcoming Parco Shibuya and Daimaru Shinsaibashi buildings come with a lot of new ideas that will make or break its reputation.

J Front Retailing Aims High with New Builds in Shibuya and Shinsaibashi

'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

ja research

ja research is an independent research platform focused exclusively on Japanese equities. Leveraging data and graphic analysis provided by Japan Analytics, we provide insights on small and medium-sized companies that have been ignored by the sell-side as well as challenging conventional wisdom on larger companies. We also offer analyst and corporate access, the latter with translation if required. 

Quantitative Analysis

<p style="text-align: center;"><strong>• RELATIVE PRICE SCORE</strong> • </p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/090/226/original/2019-06-13_16-47-07.png?1560412038" class="editor-image img-responsive" data-smartkarma-image-id="90226"></figure><div class="content-caption">Source: Japan Analytics</div><p><strong>INTRODUCTION </strong>- The Relative Price Score (RPS) is a measure of stock price performance relative to TOPIX calculated by comparing the current deviation with the mean absolute deviation of monthly and daily relative share prices. As all companies are thus on a comparable scale, 'Overbought' and 'Oversold' outliers and changes in scoring can reveal short-term and longer-term trading opportunities. Company outlier thresholds are set at<strong> +4</strong> &amp; <strong>-2</strong> and equate to the top and bottom first-to-second percentiles of historical observations from which mean reversion takes a matter of months. RPS outliers with a Score of greater than 10.0 are rare outside of the 2000 tech 'bubble'. <a href="https://www.smartkarma.com/entities/goldwin-inc" target="_blank" data-smartkarma-citation="entities:410:1">Goldwin (8111 JP)</a> has the distinction of being one of only two large-cap RPS 'ten-baggers' since that time.</p><p><strong>This insight updates our list of Overbought and Oversold companies, reviews the best and worst performing companies in terms of RPS over the last three months and adds some specific comments on stocks on each category.</strong></p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/090/196/original/2019-06-13_11-15-27.png?1560392157" class="editor-image img-responsive" data-smartkarma-image-id="90196"></figure><div class="content-caption">Source: Japan Analytics</div><p><strong>STATISTICS</strong> - Currently, of the 3,832 listed companies for which daily RPS data is available, 94 companies are 'Overbought', and 131 are 'Oversold' - 2.5% and 3.4%, respectively of the total. For the 758 companies with a market capitalisation of over ¥100b, there are 50 'Overbought' and 18 'Oversold' companies, 6.6% and 5.0%, respectively. As noted the companion Insight, <a href="https://www.smartkarma.com/insights/japan-june-relative-price-scores-market-sectors-peer-groups-more-of-the-same" target="_blank" data-smartkarma-citation="insights:30323">🇯🇵 Japan • June Relative Price Scores: Market, Sectors &amp; Peer Groups - More of The Same</a>, these numbers and percentages are unusual and were last seen in the Japanese market in 2000. </p><hr><p style="text-align: center;"><strong>• RELATIVE PRICE SCORE TOPS •</strong></p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/090/202/original/2019-06-13_13-06-49.png?1560398835" class="editor-image img-responsive" data-smartkarma-image-id="90202"></figure><div class="content-caption">Source: Japan Analytics</div><p><strong>RPS 'TOPS'</strong> - In the last two years, 444 companies have achieved an RPS of '4' or more and the average Overbought 'persistence' is 43 days. 1.4% of the total of 1.29 million traded stock days were by companies with an RPS of over 4. For companies with a market capitalisation higher than ¥100b, the numbers are 96 companies and 75 days - demonstrating the superior persistence of large capitalisation companies in this regard. Some examples of RPS mean reversion in the last three months have been <a href="https://www.smartkarma.com/entities/descente-ltd" target="_blank" data-smartkarma-citation="entities:8225:1">Descente (8114 JP)</a>, <a href="https://www.smartkarma.com/entities/alfresa-holdings-corp" target="_blank" data-smartkarma-citation="entities:10610:1">Alfresa (2784 JP)</a>, <a href="https://www.smartkarma.com/entities/320" target="_blank" data-smartkarma-citation="entities:320:1">FamilyMart Uny (8028 JP)</a>, <a href="https://www.smartkarma.com/entities/kikkoman-corp" target="_blank" data-smartkarma-citation="entities:11720:1">Kikkoman (2801 JP)</a>, <a href="https://www.smartkarma.com/entities/kobayashi-pharmaceutical-co" target="_blank" data-smartkarma-citation="entities:14930:1">Kobayashi Pharmaceutical (4967 JP)</a>, and <a href="https://www.smartkarma.com/entities/eiken-chemical-co-ltd" target="_blank" data-smartkarma-citation="entities:12675:1">Eiken Chemical (4549 JP)</a>.  </p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/090/201/original/2019-06-13_13-04-38.png?1560398780" class="editor-image img-responsive" data-smartkarma-image-id="90201"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/090/203/original/2019-06-13_13-08-46.png?1560398945" class="editor-image img-responsive" data-smartkarma-image-id="90203"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/090/204/original/2019-06-13_13-09-37.png?1560399049" class="editor-image img-responsive" data-smartkarma-image-id="90204"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/090/205/original/2019-06-13_13-12-01.png?1560399142" class="editor-image img-responsive" data-smartkarma-image-id="90205"></figure><div class="content-caption">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/090/316/original/2019-06-15_19-45-47.png?1560595558" class="editor-image img-responsive" data-smartkarma-image-id="90316"></figure><p>Source: Japan Analytics</p>
</div><p><strong>RPS 'BOTTOMS'</strong> - 372 companies have seen their RPS fall to '-2' or below in the last two years, and the average Oversold 'persistence' is 61 days. 1.5% of the total of 1.29 million traded stock days were by companies with an RPS of less than -2.  For larger capitalisation companies, the numbers are 85 companies and 89 days. A recent example of positive RPS mean reversion is <a href="https://www.smartkarma.com/entities/k-o-energy-group-inc" target="_blank" data-smartkarma-citation="entities:17701:1">K&amp;O Energy (1663 JP)</a>.</p><div class="content-caption">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/090/207/original/2019-06-13_13-14-03.png?1560399270" class="editor-image img-responsive" data-smartkarma-image-id="90207"></figure><p>Source: Japan Analytics</p>
</div><div class="content-highlight"><p>In the <strong>DETAIL </strong>section below, we list the current very overbought (RPS&gt;5), too late to buy (RPS &gt;4&lt;5) and oversold (RPS &lt;-2) stocks as well as the most substantial three-month positive and negative changes in RPS.</p></div>

• RELATIVE PRICE SCORE • Source: Japan AnalyticsINTRODUCTION - The Relative Price Score (RPS) is a measure of stock price performance relative to TOPIX calculated by comparing the current deviation with the mean absolute deviation of monthly and daily relative share prices. As all companies are thus on a comparable scale, 'Overbought' and 'Oversold' outliers and changes in scoring can reveal short-term and longer-term trading opportunities. Company outlier thresholds are set at +4 &amp; -2 and equate to the top and bottom first-to-second percentiles of historical observations from which mean reversion takes a matter of months. RPS outliers with a Score of greater than 10.0 are rare outside of the 2000 tech 'bubble'. Goldwin (8111 JP) has the distinction of being one of only two large-cap RPS 'ten-baggers' since that time.This insight updates our list of Overbought and Oversold companies, reviews the best and worst performing companies in terms of RPS over the last three months and adds some specific comments on stocks on each category.Source: Japan AnalyticsSTATISTICS - Currently, of the 3,832 listed companies for which daily RPS data is available, 94 companies are 'Overbought', and 131 are 'Oversold' - 2.5% and 3.4%, respectively of the total. For the 758 companies with a market capitalisation of over ¥100b, there are 50 'Overbought' and 18 'Oversold' companies, 6.6% and 5.0%, respectively. As noted the companion Insight, 🇯🇵 Japan • June Relative Price Scores: Market, Sectors &amp; Peer Groups - More of The Same, these numbers and percentages are unusual and were last seen in the Japanese market in 2000. • RELATIVE PRICE SCORE TOPS •Source: Japan AnalyticsRPS 'TOPS' - In the last two years, 444 companies have achieved an RPS of '4' or more and the average Overbought 'persistence' is 43 days. 1.4% of the total of 1.29 million traded stock days were by companies with an RPS of over 4. For companies with a market capitalisation higher than ¥100b, the numbers are 96 companies and 75 days - demonstrating the superior persistence of large capitalisation companies in this regard. Some examples of RPS mean reversion in the last three months have been Descente (8114 JP), Alfresa (2784 JP), FamilyMart Uny (8028 JP), Kikkoman (2801 JP), Kobayashi Pharmaceutical (4967 JP), and Eiken Chemical (4549 JP).  
Source: Japan Analytics
RPS 'BOTTOMS' - 372 companies have seen their RPS fall to '-2' or below in the last two years, and the average Oversold 'persistence' is 61 days. 1.5% of the total of 1.29 million traded stock days were by companies with an RPS of less than -2.  For larger capitalisation companies, the numbers are 85 companies and 89 days. A recent example of positive RPS mean reversion is K&amp;O Energy (1663 JP).
Source: Japan Analytics
In the DETAIL section below, we list the current very overbought (RPS&gt;5), too late to buy (RPS &gt;4&lt;5) and oversold (RPS &lt;-2) stocks as well as the most substantial three-month positive and negative changes in RPS.

🇯🇵 Japan • Relative Price Scores - Overbought & Oversold Companies - June 2019

<p>The Japanese department store sector is in decline overall but that doesn't mean that all department stores are failing equally. Some stores and some chains are performing well and will continue to prosper in the years ahead thanks to support from wealthy Japanese, inbound tourists and their own efforts to extract more sales and margins through investment in key locations.</p><p>One of the future winners is <a href="https://www.smartkarma.com/entities/8947" target="_blank" data-smartkarma-citation="entities:8947:1">J Front Retailing (3086 JP)</a> which, as well as one of the best plans for future proofing its department stores, has a big stake in <a href="https://www.smartkarma.com/entities/8431" target="_blank" data-smartkarma-citation="entities:8431:1">Parco (8251 JP)</a> which is about to see a big jump in sales on the back of new buildings coming online.</p><p>A good example of how J-Front Retailing is re-working its assets is its plan to turn over a large chunk of its rebuilt Daimaru Shinsaibashi store to tenants after it reopens this coming Autumn. It will also install Parco to manage the neighbouring annex building, which will reopen in 2021.</p><p>Together the two buildings aim to target a much broader set of customers than a standard department store. Where warranted, J-Front also plans new, standalone shopping buildings with local appeal. The first of these opened in Kyoto last month.</p>

The Japanese department store sector is in decline overall but that doesn't mean that all department stores are failing equally. Some stores and some chains are performing well and will continue to prosper in the years ahead thanks to support from wealthy Japanese, inbound tourists and their own efforts to extract more sales and margins through investment in key locations.One of the future winners is J Front Retailing (3086 JP) which, as well as one of the best plans for future proofing its department stores, has a big stake in Parco (8251 JP) which is about to see a big jump in sales on the back of new buildings coming online.A good example of how J-Front Retailing is re-working its assets is its plan to turn over a large chunk of its rebuilt Daimaru Shinsaibashi store to tenants after it reopens this coming Autumn. It will also install Parco to manage the neighbouring annex building, which will reopen in 2021.Together the two buildings aim to target a much broader set of customers than a standard department store. Where warranted, J-Front also plans new, standalone shopping buildings with local appeal. The first of these opened in Kyoto last month.

J-Front Retailing: One of the Few Winners in Japanese Department Stores

Japan

J. FRONT RETAILING CO., Ltd. is a holding company established through the merger of Daimaru and Matsuzakaya.  J. FRONT RETAILING operates department stores and supermarkets. The Company also manages subsidiaries which operate in wholesale businesses.

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J Front Retailing (3086 JP)

J Front Retailing to Buy Out PARCO (8251)

In a long-awaited move, today J Front Retailing (3086 JP) announced that it would buy out minorities in subsidiary PARCO Co Ltd (8251 JP). PARCO...

Travis Lundy

J Front Retailing Aims High with New Builds in Shibuya and Shinsaibashi

J Front Retailing (3086 JP) is one of the few Japanese department store-centred retail groups that is not only willing to invest in new and...

Michael Causton

🇯🇵 Japan • Relative Price Scores - Overbought & Oversold Companies - June 2019

• RELATIVE PRICE SCORE • INTRODUCTION - The Relative Price Score (RPS) is a measure of stock price performance relative to TOPIX calculated by...

Campbell Gunn

J-Front Retailing: One of the Few Winners in Japanese Department Stores

The Japanese department store sector is in decline overall but that doesn't mean that all department stores are failing equally. Some stores and...

Michael Causton

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

J Front Accelerates Diversification Plan with Parco Share Purchase

J Front Retailing (3086 JP) has been busy with rebuilding and remodelling, culminating in November with the reopening of Parco Shibuya, as it...

Michael Causton

J Front Retailing to Buy Out PARCO (8251)

In a long-awaited move, today J Front Retailing (3086 JP) announced that it would buy out minorities in subsidiary PARCO Co Ltd (8251 JP). PARCO...

Travis Lundy

J Front Retailing Aims High with New Builds in Shibuya and Shinsaibashi

J Front Retailing (3086 JP) is one of the few Japanese department store-centred retail groups that is not only willing to invest in new and...

Michael Causton

🇯🇵 Japan • Relative Price Scores - Overbought & Oversold Companies - June 2019

• RELATIVE PRICE SCORE • INTRODUCTION - The Relative Price Score (RPS) is a measure of stock price performance relative to TOPIX calculated by...

Campbell Gunn

J-Front Retailing: One of the Few Winners in Japanese Department Stores

The Japanese department store sector is in decline overall but that doesn't mean that all department stores are failing equally. Some stores and...

Michael Causton