J.FRONT RETAILING Co.,Ltd.

Business Details

This segment encompasses Daimaru Matsuzakaya Department Stores Co., Ltd., Hakata Daimaru, Kochi Daimaru, and other subsidiaries, engaged in the sale of apparel, sundries, household goods, food, and other merchandise. The segment primarily targets affluent domestic customers and external sales clients, while also capturing inbound demand. As the Group's core segment, accounting for approximately 60% of consolidated revenue, it is driving expansion of its customer base through broader external sales activities and enhanced inbound CRM initiatives.

Recent Overview

External sales and duty-free sales remained solid, but revenue declined slightly due to the impact of the Daimaru Umeda renovation and the prior-year Expo-related sales rebound; business profit was roughly flat.

In the Department Store Business for Q1 FY2027 (ending February 2027) (March-May 2026), domestic sales centered on external sales and duty-free sales increased, but revenue decreased 0.3% year-on-year to ¥63,383 million due to the negative impact of reduced sales floor space from the large-scale renovation at Daimaru Umeda Store and the rebound from prior-year Expo-related sales. Business profit was roughly flat, up 0.2% year-on-year to ¥8,291 million. Operating profit decreased 6.0% year-on-year to ¥8,506 million, partly due to the rebound from gains on sale of fixed assets recorded in the prior year. In the Nagoya Sakae area, "HAERA" opened on June 11, and collaborative initiatives with Group companies are being promoted.

Key Products

Growth Drivers

• Expansion of the customer base through enhanced content for domestic affluent customers and external sales clients, and broadening of external sales activities
• Improved store appeal and increased customer traffic and profitability at Matsuzakaya Nagoya Store (main building and north building renovation completed) and Daimaru Umeda Store (large-scale renovation in progress)
• Full-scale utilization of inbound CRM and collaborative campaigns with overseas payment companies to acquire and encourage repeat visits from affluent overseas customers
• Creation of new revenue sources through in-house content development, including the reuse business (MEGRUS) and next-generation sweets brands
• Maximization of area value through collaboration with the Shopping Center Business and Developer Business, spurred by the opening of "HAERA" in the Nagoya Sakae area
• Improved customer LTV through collaboration with the Payment & Finance Business, including expansion of the Daimaru Matsuzakaya Card's financing balance

Risks

• Risk of fluctuations in inbound (duty-free) sales: sales are significantly affected by Japan-China relations, exchange rates, and fluctuations in the number of visitors to Japan
• Risk of dampened consumer sentiment due to rising prices: a slowdown in domestic personal consumption could affect department store sales
• Temporary impact on sales and profit during large-scale renovation work: the large-scale renovation at Daimaru Umeda Store is ongoing, and negative effects from reduced sales floor space are expected to continue
• Deterioration in comparative basis due to the rebound from temporary factors such as prior-year Expo-related sales and gains on sale of fixed assets
• Risk of customer attrition due to intensifying competition with other competitors, e-commerce, and the reuse market
• Uncertainty regarding the outlook for the domestic and overseas economy due to geopolitical risks and the impact of U.S. trade policy, among other factors