Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>YFO has played a relatively upfront game for <a href="https://www.smartkarma.com/entities/toyo-construction-co-ltd" target="_blank" data-smartkarma-citation="entities:1176:1" rel="noopener">Toyo Construction (1890 JP)</a> - badly at first, then better. </li>
<li>With <a href="https://www.smartkarma.com/entities/takashimaya-co-ltd" target="_blank" data-smartkarma-citation="entities:370:1" rel="noopener">Takashimaya (8233 JP)</a> and <a href="https://www.smartkarma.com/entities/h2o-retailing-corp" target="_blank" data-smartkarma-citation="entities:17562:1" rel="noopener">H2O (8242 JP)</a> now more secure and cross-shareholdings more problematic, they will sell off their equity in each other but continue to work on joint projects.</li>
<li>
<a href="https://www.smartkarma.com/entities/skyworth-group-limited" target="_blank" data-smartkarma-citation="entities:10941:1" rel="noopener">Skyworth Group Limited (751 HK)</a>'s latest buyback offers a minimum proration of 7.8%, although applying the last buyback two years ago, it's likely to be 13%+.</li>
</ul>


YFO has played a relatively upfront game for Toyo Construction (1890 JP) - badly at first, then better. 
With Takashimaya (8233 JP) and H2O (8242 JP) now more secure and cross-shareholdings more problematic, they will sell off their equity in each other but continue to work on joint projects.

Skyworth Group Limited (751 HK)'s latest buyback offers a minimum proration of 7.8%, although applying the last buyback two years ago, it's likely to be 13%+.


Last Week in Event SPACE: Toyo, Takashimaya/H2O, Skyworth, Shandong Fengxiang, O2Micro

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. 

<ul>
<li>Takashimaya and H2O Retailing entered what felt like a forced engagement of convenience in 2008 when all their other competitors were busy merging.</li>
<li>Although discussions for a full merger were held, in truth, thea agreement was more about practical collaboration to create more efficiencies. </li>
<li>With both firms now more secure and cross-shareholdings more problematic, they will sell off their equity in each other but continue to work on joint projects.</li>
</ul>


Takashimaya and H2O Retailing entered what felt like a forced engagement of convenience in 2008 when all their other competitors were busy merging.
Although discussions for a full merger were held, in truth, thea agreement was more about practical collaboration to create more efficiencies. 
With both firms now more secure and cross-shareholdings more problematic, they will sell off their equity in each other but continue to work on joint projects.


Equity Bottom-Up

Isetan Mitsukoshi Holdings Ltd / Equity Bottom-Up

<ul>
<li>Isetan-Mitsukoshi is dangerously dependent on a small number of wealthy customers for a lot of its revenue.</li>
<li>Wealthy VIP customers account for around half of sales at both Isetan Shinjuku and Mitsukoshi Nihonbashi department stores</li>
<li>But the wealth market is one of the few segments to continue to grow so should be a source of growth even while the rest of its market shrinks.</li>
</ul>


Isetan-Mitsukoshi is dangerously dependent on a small number of wealthy customers for a lot of its revenue.
Wealthy VIP customers account for around half of sales at both Isetan Shinjuku and Mitsukoshi Nihonbashi department stores
But the wealth market is one of the few segments to continue to grow so should be a source of growth even while the rest of its market shrinks.


50% of Sales at Isetan-Mitsukoshi Flagships from Top 5% of Customers

<ul>
<li>Subscription usage continues to rise in Japan and a new survey suggests just under 50% of teens and 20s plan to use a subscription service this year.</li>
<li>Daimaru-Matsuzakaya’s luxury and designer brand rental business has been so successful that the company had to turn away new members for a while.</li>
<li>The department store's owner, <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> sees subscriptions as a third pillar to its business in the future.</li>
</ul>


Subscription usage continues to rise in Japan and a new survey suggests just under 50% of teens and 20s plan to use a subscription service this year.
Daimaru-Matsuzakaya’s luxury and designer brand rental business has been so successful that the company had to turn away new members for a while.
The department store's owner, J Front Retailing (3086 JP), sees subscriptions as a third pillar to its business in the future.


Subscriptions Provide Growth Model for J Front's Daimaru-Matsuzakaya

<ul>
<li>Takashimaya will close its store in Tachikawa early next year.</li>
<li>This can be seen as a further sign of an improving outlook for a smaller department store sector. </li>
<li>More closures will rid the sector of excess capacity and solidify positioning as a genuinely upscale format for the affluent.</li>
</ul>


Takashimaya will close its store in Tachikawa early next year.
This can be seen as a further sign of an improving outlook for a smaller department store sector. 
More closures will rid the sector of excess capacity and solidify positioning as a genuinely upscale format for the affluent.


Japan

Takashimaya Company, Limited., founded in Kyoto in 1831, operates department stores.  The Company's main stores are located in Tokyo, Osaka, and Kyoto. Takashimaya also operates department stores in Paris, France, Singapore, China, Australia, and New York, USA.  The Company retails clothing, foods, art objects, sundry goods, and household utensils.  The Company also operates restaurants.

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Takashimaya (8233 JP)

Last Week in Event SPACE: Toyo, Takashimaya/H2O, Skyworth, Shandong Fengxiang, O2Micro

The long weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Takashimaya and H2O Cancel Tie-Up

Takashimaya and H2O Retailing originally discussed merger in 2008 at the height of department store defensive measures but never really committed....

Michael Causton

50% of Sales at Isetan-Mitsukoshi Flagships from Top 5% of Customers

Isetan-Mitsukoshi is focusing on VIPs which already account for 50% of sales at its flagships but this is not enough. Drags on sales and profits...

Michael Causton

Subscriptions Provide Growth Model for J Front's Daimaru-Matsuzakaya

Subscription retailing is on the up in Japan including at the luxury end, providing a way for J Front to not only add new revenue streams but also...

Michael Causton

Takashimaya to Close Tachikawa

Takashimaya is closing a major department store shortly. This is actually good news for the firm and for the sector and should herald a new era of...

Michael Causton

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