IZUTSUYA CO., LTD.

Business Details

Engaged in the sale of apparel, personal items, sundries, household goods, and foodstuffs, as well as the operation of dining halls and cafes. Izutsuya Co., Ltd. (Kokura Main Store and satellite shops) and consolidated subsidiary Yamaguchi Izutsuya Co., Ltd. conduct business operations, with Restaurant Izutsuya Co., Ltd. handling the restaurant division and Izutsuya Shoji Co., Ltd. handling ceremonial gifts and wholesale. As the only department store in the region, its main customer base consists of affluent customers and occasion-driven demand, with the provision of high-value-added purchasing experiences as its value axis. Sales converted on a gross merchandise value basis for agency transactions were ¥12,651 million (98.5% year-on-year).

Recent Overview

Both Q1 sales and operating income declined year-on-year. Expanded equity-method investment loss significantly squeezed ordinary income.

In the Department Store Business segment for the first quarter of FY2027 (ending February 2027) (March-May 2026), sales were ¥4,975 million (97.7% year-on-year) and operating income was ¥105 million (83.0% year-on-year), representing a decline in both revenue and profit. On a consolidated basis, the equity-method investment loss surged from ¥4 million in the same period of the prior year to ¥30 million, causing total non-operating expenses to swell to ¥170 million, and ordinary income deteriorated significantly to ¥2 million (compared to ¥96 million in the same period of the prior year). At the Yamaguchi Store, while the basement food sales floor was closed in preparation for the Lopia introduction, the company worked to attract customers through new tenant introductions at the main building (Flying Tiger Copenhagen, Henri Charpentier, etc.) and first-ever planned events. The full-year earnings forecast (sales of ¥21,000 million, operating income of ¥800 million) remains unchanged.

Key Products

Growth Drivers

• Establishment of a new revenue base through the Izutsuya App's alliance business (listing fees and contract commissions)
• Enhanced customer convenience and increased store visits through expanded app functionality such as the "Town Recommended Coupons"
• Strengthened product appeal and customer draw through the introduction of new tenants such as Scandinavian design goods, confectionery, and apparel
• Creation of new businesses and promotion of the regional trading business through the business alliance with Japan Asia Investment Co., Ltd.
• Increased customer traffic and strengthened referral collaboration with the Main Store through the introduction of Lopia at the Yamaguchi Store (scheduled to open July 22)
• Acquisition of next-generation customer segments through experiential events targeting women in their 30s and 40s

Risks

• Significant pressure on ordinary income due to expansion of equity-method investment loss (from ¥4 million in the same period of the prior year to ¥30 million in the current period)
• Weakening store visit numbers amid continued strengthening of consumer thrift consciousness due to ongoing price increases
• Risk of shrinking trade area (due to population decline and aging/low birth rate) specific to department stores located in regional cities and suburban areas with limited inbound demand
• Risk of temporary sales decline due to closure of the basement food sales floor at the Yamaguchi Store
• Adverse impact on consumer sentiment due to the pause in yen depreciation and rising geopolitical risks
• Profit pressure due to persistently high fixed cost burden, including depreciation (¥332 million in Q1 cumulative)