What: Some Japanese department stores are starting to reap the fruits of their efforts when it comes to cost-cutting and rationalisation.

Why it is important:  Japan is a market where department stores started to feel the pinch years ago. The fact that they are able to turnaround is a sign that the format remains relevant in the country.

Three major Japanese department store operators, Takashimaya Co., J. Front Retailing Co., and Matsuya Co., reported significant increases in net profits for the fiscal year through February, as customer traffic rebounded following the easing of the COVID-19 pandemic.

Takashimaya's profit rose 5.2-fold to ¥27.8 billion, driven by luxury brand goods sales and cost-cutting efforts.

J. Front Retailing, operating Daimaru and Matsuzakaya stores, saw a 3.3-fold increase in profits to ¥14.2 billion, while Matsuya Co. experienced a 4.3-fold profit surge due to high-end goods spending by foreign tourists.

However, Sogo & Seibu Co., a Seven & i Holdings subsidiary, reported a fourth consecutive year of net loss, impacted by store renovation costs.

Industry executives anticipate a rise in customers from mainland China following the relaxation of Japan's pandemic-related border controls, but J. Front Retailing's president urged caution in overestimating the current situation.

Japanese department stores are increasing their profits