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. 

Thematic (Sector/Industry)

The following is an in-depth review of Japanese retail in the last 18 months covering all the main formats and categories, providing a quick way to see an overview of all the key trends and winners and losers in Japanese retailing now and going forward.FY2020 was an anomaly and one that businesses everywhere will want to forget and never repeat. There was more than enough pain among Japan’s top retailers last year, but equally some formats did surprisingly well given the circumstances.For most, work-from-home was the single most important factor in determining a chain’s fortunes. City-centre stores and shopping centres offering mostly discretionary shopping have been hit hard, as have convenience stores.But those chains selling essentials, healthcare, electronics and, most importantly, food, all saw their fortunes improve. The pandemic has also revealed the strong, dynamic players and exposed the weaker ones. Oh, and everyone needs to be online.

The following is an in-depth review of Japanese retail in the last 18 months covering all the main formats and categories, providing a quick way to see an overview of all the key trends and winners and losers in Japanese retailing now and going forward.FY2020 was an anomaly and one that businesses everywhere will want to forget and never repeat. There was more than enough pain among Japan’s top retailers last year, but equally some formats did surprisingly well given the circumstances.For most, work-from-home was the single most important factor in determining a chain’s fortunes. City-centre stores and shopping centres offering mostly discretionary shopping have been hit hard, as have convenience stores.But those chains selling essentials, healthcare, electronics and, most importantly, food, all saw their fortunes improve. The pandemic has also revealed the strong, dynamic players and exposed the weaker ones. Oh, and everyone needs to be online.

The Polarising Pandemic in Japanese Retail

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Last year, I wrote about <a href="https://www.smartkarma.com/entities/joyful-honda-co-ltd" target="_blank" data-smartkarma-citation="entities:13616:1" rel="noopener">Joyful Honda (3191 JP)</a>'s implementation of a ¥2.5bn ToSTNeT-3 into Accelerated Share Repurchase. It was the first such transaction I knew of in Japan.</li>
<li>This year, they have just announced another for nearly twice the size. It is worth looking at the details and comparing the stock vs Peers.</li>
<li>It is also worth understanding exactly what the incentives are for whom and how that impacts the path. And who might respond to it.</li>
</ul>


Last year, I wrote about Joyful Honda (3191 JP)'s implementation of a ¥2.5bn ToSTNeT-3 into Accelerated Share Repurchase. It was the first such transaction I knew of in Japan.
This year, they have just announced another for nearly twice the size. It is worth looking at the details and comparing the stock vs Peers.
It is also worth understanding exactly what the incentives are for whom and how that impacts the path. And who might respond to it.


Joyful Honda (3191) - Repeats Its ASR In Double the Size

<ul>
<li>Yesterday after the close, 500+ store home centre operator <a href="https://www.smartkarma.com/entities/kohnan-shoji-co-ltd" target="_blank" data-smartkarma-citation="entities:5662:1" rel="noopener">Kohnan Shoji (7516 JP)</a> announced full-year earnings (revs -0.2%, OP -16.6%, NP -16.4%yoy) and a buyback. </li>
<li>The buyback is for up to 1.2mm shares and up to ¥4bn to spend from here to end Sep 2022.</li>
<li>The shareholder register is interesting, diverse, and makes one wonder whether the buyback is to soften the blow of lower income, defence against an activist, or something else.</li>
</ul>


Yesterday after the close, 500+ store home centre operator Kohnan Shoji (7516 JP) announced full-year earnings (revs -0.2%, OP -16.6%, NP -16.4%yoy) and a buyback. 
The buyback is for up to 1.2mm shares and up to ¥4bn to spend from here to end Sep 2022.
The shareholder register is interesting, diverse, and makes one wonder whether the buyback is to soften the blow of lower income, defence against an activist, or something else.


Kohnan Shoji (7516) Buyback - Shareholder Return? Activist Defense? Future MBO? All of the Above?

<ul>
<li>Keiyo announced a large (9.2% of shares out) ToSTNeT-3 buyback for tomorrow morning at JPY 855/share. </li>
<li>Normally this would be an occasion for looking at the significant accretion. </li>
<li>This time there are possible offsets which are less encouraging.</li>
</ul>


Keiyo announced a large (9.2% of shares out) ToSTNeT-3 buyback for tomorrow morning at JPY 855/share. 
Normally this would be an occasion for looking at the significant accretion. 
This time there are possible offsets which are less encouraging.


Very Large Keiyo (8168 JP) Buyback NOT Necessarily Bullish

Like most lifestyle segments, the outdoor apparel &amp; equipment market contracted in 2020 but this is a blip in an otherwise sustained multi-year expansion. Long-term growth is being driven by both expanded supply and demand as consumers of all ages embrace the great outdoors for the first time in generations and suppliers rush to equip them.This has benefited retailers such as <a href="https://www.smartkarma.com/entities/workman-co-ltd" target="_blank" data-smartkarma-citation="entities:8467:1" rel="noopener">Workman Co Ltd (7564 JP)</a>, <a href="https://www.smartkarma.com/entities/goldwin-inc" target="_blank" data-smartkarma-citation="entities:410:1" rel="noopener">Goldwin Inc (8111 JP)</a> and <a href="https://www.smartkarma.com/entities/snow-peak-inc" target="_blank" data-smartkarma-citation="entities:7218:1" rel="noopener">Snow Peak Inc (7816 JP)</a> but it also means that a number of other retailers have entered the market, creating new competition, including <a href="https://www.smartkarma.com/entities/bic-camera-inc" target="_blank" data-smartkarma-citation="entities:11328:1" rel="noopener">Bic Camera Inc (3048 JP) </a>and <a href="https://www.smartkarma.com/entities/kohnan-shoji-co-ltd" target="_blank" data-smartkarma-citation="entities:5662:1" rel="noopener">Kohnan Shoji (7516 JP).</a>

Like most lifestyle segments, the outdoor apparel &amp; equipment market contracted in 2020 but this is a blip in an otherwise sustained multi-year expansion. Long-term growth is being driven by both expanded supply and demand as consumers of all ages embrace the great outdoors for the first time in generations and suppliers rush to equip them.This has benefited retailers such as Workman Co Ltd (7564 JP), Goldwin Inc (8111 JP) and Snow Peak Inc (7816 JP) but it also means that a number of other retailers have entered the market, creating new competition, including Bic Camera Inc (3048 JP) and Kohnan Shoji (7516 JP).

Japan's Outdoor Market Expands 3.2% in 2019 but Contraction in 2020

Japan

KOHNAN SHOJI CO., LTD. operates a home improvement center chain, located in Osaka, Hyogo, and Kyoto.  The Company sells mainly home improvement products such as lumber, hardware, paint and also household utensils.  Kohnan Shoji also sells auto and leisure products.

Kohnan Shoji (7516 JP)

The Polarising Pandemic in Japanese Retail

A complete review of the Japanese retail sector in the last 18 months, format by format, category by category, providing key trends and winners &...

Michael Causton

Joyful Honda (3191) - Repeats Its ASR In Double the Size

Joyful Honda is conducting another ASR-style buyback. It is worthwhile looking at what happened last time vs Peers, and understanding incentives...

Travis Lundy

Kohnan Shoji (7516) Buyback - Shareholder Return? Activist Defense? Future MBO? All of the Above?

A Kohnan Shoji (7516) buyback announcement allows for decent market impact, on top of relatively cheap look-through PE-style valuation and activist...

Travis Lundy

Very Large Keiyo (8168 JP) Buyback NOT Necessarily Bullish

Keiyo announced a large buyback for tomorrow AM. Big accretion is usually bullish but Keiyo is rich to peers, and it is not clear where incremental...

Travis Lundy

Japan's Outdoor Market Expands 3.2% in 2019 but Contraction in 2020

Japan's outdoor market is one of few segments to see solid growth in recent years and while the market will dip in 2020, will grow well in the next...

Michael Causton