What: The Japanese retail market has tremendously evolved in the past 40 years.

Why it is important: Retailers know more than anyone else that past grandeur is not a safety belt for the future. Sogo has gone through its second major issue in less than 40 years.

Shopping mirrors societal shifts and nowhere is this clearer than in Japan’s department stores, which have evolved alongside the nation's capitalism. Tracing its roots back to 1673 with Echigoya, the journey of Japanese department stores is intertwined with the nation’s economic history. These stores, once symbolic of Japan's economic prowess, faced severe challenges during economic downturns, with significant events such as Sogo Co.’s major bankruptcy in 2000, and Sogo & Seibu Co.’s recent sale to a US fund after a historic worker strike. Such moves highlight the evolving business landscape in Japan, where even long-cherished institutions are being sold to foreign entities.

Although the industry experienced restructuring and a focus on domestic over international expansion, the iconic nature of some stores remains. Currently, there's a transition from premium department stores to discount electronics and online shopping, with younger generations favoring online platforms like Shein. However, flagship stores in major cities are surprisingly thriving, indicating a wealth shift to major urban centers. As Japan's societal norms and economic structures evolve, so will its iconic department stores.

How Sogo reflects the evolution of Japan

What: After plummeting indicators for the third consecutive quarter, Falabella will sell assets to reduce its debt, which is already around USD 5bn dollars.

Why it is important: The project includes the sale of stand-alone stores, distribution centers and the former offices of the Sodimac chain located in Renca, for an estimated total of USD 400mn. Falabella considers other actions that cannot be disclosed yet.

Falabella will sell assets to reduce debt

What: KaDeWe appoints Alexandra Bagehorn as General Manager.

Why it is important: KaDeWe is reorganising their management.

Bagehorn will start the role on December 1st. She is returning to the KaDeWe Group after working at the Alsterhaus in Hamburg and Montblanc. Additionally, Timo Weber, the previous head of KaDeWe in Berlin, has been appointed as the Retail Director of the KaDeWe Group, effective from January 1st. His focus will be on strategically managing three department stores (KaDeWe, Alsterhaus and Oberpollinger) and the development of the two new stores that are planned to open in spring 2025 , Lamarr in Vienna and Carsch-Haus in Düsseldorf.

KaDeWe Group brings Bagehorn back on board as General Manager

What: Mukesh Ambani's new Mumbai mall, Jio World Plaza, is attracting luxury brands such as Gucci, Cartier, and Louis Vuitton, who have signed leases to open stores there.

Why it is important: The signing of leases by luxury brands in Mukesh Ambani's new Mumbai mall highlights the growing importance of the Indian market and its potential for luxury retail growth.

The mall is expected to open this year, and Reliance Industries, Ambani's company, will share monthly net revenue with the tenants. The desire for quality retail spaces has driven luxury brands to establish a presence in the mall, as they previously had to open their first outlets in luxury hotels. Now, they seek to have a meaningful presence in India where the market is growing. Rental agreements include clauses to maintain the luxury appeal of the mall. With India having over 800,000 millionaires and the economy projected to strengthen, leading to a rise in millionaires, the luxury spending market in India is expected to expand by nearly 12% annually according to Euromonitor.

LVMH, Gucci to expand in India with new outlets in Reliance’s luxury mall

What: The Handbag Clinic has opened a space in Harrods in London to offer repair and restoration for both bags and shoes, as well as buying and selling handbags.

Why it is important: The collaboration aligns with Harrods' sustainability plan, aiming to promote conscious buying and aftercare to extend the lifespan of luxury items.

The concession is located on the 5th floor within the Shoe Heaven space and repair prices start at around GBP 20.

Handbag Clinic opens in Harrods for resale and repair 

What: Walmart plans to increase the involvement of its employees in last-mile deliveries.

Why it is important: Walmart will be able to enhance its delivery capabilities and keep up with the surge in online ordering.

Currently, the number of deliveries made by Walmart associates is small in comparison to those handled by independent contractors, particularly through the Spark Driver platform. However, as Walmart expands its last-mile network, it intends to own more vehicles and have employees deliver more orders. The company has previously experimented with using store employees for deliveries but ended the pilot program in 2018.

Walmart wants employees to make more last-mile deliveries

What: SM Investments cite that post-pandemic shopping by Philippine customers is the driving force behind the impressive first-half results.

Why it is important: Revenues have risen in department stores by 27% overall with retail sales increasing by 18%.

In the first half of 2023, consolidated revenue jumped 18% to PHP 286.3 billion and consolidated net income increased by 32% to PHP 36.5 billion. The retail segment made up 17% of total net earnings.

Revenge spending underpins Philippine’s SM Investments first-half

What: Asos partners with Rokt to provide shoppers with targeted content.

Why it is important: The partnership will improve Asos’s retail media division.

Asos will be able to use first-party data to personalise shoppers’ experience as well as show relevant non-endemic offers from Rokt’s marketplace. This will boost Asos’s retail media division which Is a growing revenue source for many big chains.

Retail media revenue is predicted to overtake TV revenue by 2028.

Asos joins forces with Rokt to boost retail media business 

What: Department stores are increasing efforts to appeal to foreign tourists because local consumers are more budget-conscious amid rising debt and interest rates.

Why it is important: Sales are being driven by tourists in South Korea thanks to the growing popularity of K-beauty, K-fashion, and K-pop.

Lotte Department Store is improving its K-fashion to attract foreigners by opening more Korean brand stores such as Ader Error and Mardi Mercredi at its Jamil branch and Martin Kim at its Myeong-dong branch.

Shinsegae also noticed sales from foreigners increase by 460% between January and July in their Sogong-dong branch and 465% at its Busan branch.

The Hyundai Seoul store has also become a popular stop for tourists and the proportion of sales to foreign customers has reached 16% and 12% at the Gangnam and Yeouido branches respectively.

Department stores go all out to attract tourists

What: Le Bon Marche reveals its renovated jewellery space after a year of renovations and its new services.

Why it is important: The revamped jewellery section will offer personalisation services and become a point of attraction for shoppers.

The space is 3,200 square feet and houses 17 brands, both local and international. There is a central pop-up space that will first feature the Spanish brand, Simeuro.

Products offered at the new space include a charms bar with Aurélie Bidermann, permanent jewellery by Atelier VM and Vanrycke, and personalised gold-plated and silver medals by Medai. There is an aim to keep the selection affordable with prices under just EUR 100 on average and up to EUR 2,000 for fine jewellery. The store also does not want to gender the department and is giving space to brands that resonate more with a male audience.

The renovation was on par with Le Bon Marche’s sustainability ideology with over 50% of materials being reused in the new space, new materials being sustainably sourced, and mechanically assembled parts that will allow the reuse of materials in the future.

Le Bon Marche steps up personalisation in revamped jewellery space 

What: Falabella announces its new project at Mall Espacio Urbano 15 in Vina del Mar to add a new Falabella store.

Why it is important: The new opening of the store is a strategic decision to attract tourists to Vina del Mar and contribute to the development of the area.

The store, reported to open in 2025, has an investment of USD 11.5 million, will cover two floors in the Vinamarino complex, and offer fashion, beauty, home, and decoration. It will include “Workshop F”, a personalisation space for garments, digital kiosks, a “Scan and Pay” system, as well as Click&Collect machines.

Falabella will invest more than USD 11 million in a new store in Vina del Mar

What: Retailers are rethinking the structure of private brands- from halting operations to revamping the current lines.

Why it is important: Private-label brands are built around customer needs, yet with declining brand loyalty and increased openness to private-label products in the US, huge retailers are finding it difficult to turn profit.

Amazon has closed most of its private brands, and Macy’s, which revamped their private label portfolio with the launching of four new brands, has seen a decline of 20% in sales to 16%. Footlocker, however, has seen success in their private brand with an increase to 11% in apparel sales.

Revolve currently operates 31 private brands which were once not differentiated enough and undercutting each other, but the company has optimised the assortment and the share of private label sales has grown.

The company was able to grow its brand portfolio steadily through its early acquisitions and treat each line as its “own unique, living and breathing thing” since they have elevated prices and aren’t only competing on costs.

Oliver Chen, a senior analyst at Cowen, dictates that the best strategy for retailers is for the brands to be of reasonable price and better quality than third-party suppliers along with a clear reason for existing, as brand awareness and a sense of legitimacy is a big challenge in private label.

Do shoppers still want retailers’ private brands?

What: Harrods has closed a remarkable year thanks to a sustained activity in fashion.

Why it is important: Harrods is increasingly positioning themselves as the only world-class luxury destination, which is one of the two options that is increasingly emerging as viable for department stores (the other one being to become the only one-stop shop for tourists and locals).

Harrods, the luxury department store in London, experienced a significant surge in profits, recording £171.6 million ($217.9 million) in the year to January 2023, with sales rising by 52% to £994 million.

This remarkable growth was attributed to the return of big-spending tourists following pandemic-related disruptions.

Harrods' recovery was facilitated by its year-long uninterrupted operation, along with investments in its physical and digital presence. While other department stores struggled, Harrods' success stands out.

Plans for the future include expanding services such as private shopping and introducing new womenswear and furniture rooms. Despite challenges, the retailer's focus on innovation and exceptional offerings has driven its remarkable performance.

Harrods has recovered from the covid woes

What: John Lewis experiences growth in its menswear department with its in-house labels such ad Anyday, Kin, and John Lewis & Partners.

Why it is important:  Sales for John Lewis’ private brand labels have increased by 13% as the company accommodates trendy styles, great quality, and classic fabrics.

The drivers behind their sales have been knitwear, outerwear, and tailoring.

The company’s 2022-23 annual report showed that sales decreased by 2% in the John Lewis and Waitrose group, but the men’s category rose by 20% year-on-year while womenswear increased by 17%.

John Lewis sees growth in menswear with own label brands

What: Drapers delves into the challenges that luxury department stores face and how the businesses can evolve following the departure of the Harvey Nichols CEO, Manju Malhorta.

Why it is important: Top department stores are tackling how to stay relevant despite growing profits and operating losses.

Harvey Nichols has yet to return to profit since the pandemic hit with its latest results reporting an operating loss of GBP 3.7 million in the 2021-22 fiscal year, an improvement from the GBP 17.7 million in the previous year. Harrods has more than doubled its operating profits in the year to January 28 2023, up from GBP 71.4 million- it still has not surpassed its pre-pandemic figure of GBP 237.1 million.

A director of a brand stocked at Harvey Nichols believes that store activations are important for department stores to garner traffic and customers. Examples of this would be Harrods introducing the Prada café or the Dior Christmas takeover.

Another director says that young customers and newer brands are essential for department stores to stay relevant. “Department stores need to understand who their core consumers are and focus 80% on that but it’s also important to play around the edges with the other 20% on attracting the younger innovative customers [with newer brands].”

Loyalty programmes are also useful for gaining sales, as it creates a more personal experience for shoppers. Harrods has launched a scheme like this with its invitation-only members’ club in Shanghai, and Selfridges has done the sale with its Selfridges Unlocked feature that gives exclusive offers to members.

How to reinvent the luxury department store 

What: Japanese department stores’ sales significantly rebound towards 2019 levels.

Why it is important: Isetan Shinjuku and Hankyu Umeda are doing particularly well thanks to luxury sales and personalized advice. At Isetan, 1/3 of sales are now made via personal shoppers and advisors.

Japanese department stores are experiencing a recovery from the pandemic's impact, with fiscal 2022 seeing a 16% increase in total sales. This growth is attributed to robust spending by young high-income earners in metropolitan areas.

Sales across 167 stores operated by 66 companies reached JPY 5.1 trillion (USD 35 billion), representing a second consecutive year of growth and recovering to 88% of the level recorded in fiscal 2019 before the pandemic.

Well-off shoppers, including young entrepreneurs and investors, are driving this trend, and luxury department stores like Isetan Mitsukoshi and Hankyu are benefiting from increased spending. Additionally, the resumption of group tours from China is expected to boost duty-free sales further.

Japan's young urban rich drive department store sales

What: Kohl’s reported its Q2 earnings and is implementing more of Sephora's merchandise in its stores.

Why it is important: Sephora has given Kohl’s the ability to grow and attract more customers.

Kohl’s reported a decrease of 4.8% in sales to USD 3.7 billion and a drop in net income to USD 58 million from USD 143 million compared to 2022. Due to Sephora’s success in attracting new young customers and yielding a 20% increase in beauty and fragrance sales, Kohl’s tested with 5 stores to carry Sephora merchandise. Forty-five additional stores will also follow this format in smaller 750-square-foot Kohl’s locations.

The company projects a sales increase of 2 to 4% and a rise in earnings per diluted shares from USD 2.10 to USD 2.70.

Kohl’s reports; Sephora is a big driver 

What: Neiman Marcus Group is reviewing its structure and organization to boost profitability.

Why it is important: Although the Covid-19 pandemic has forced organizations to radically reinvent themselves, for some the job is not entirely done and they still need to dynamically adapt to constantly changing conditions.

Neiman Marcus Group has made unspecified cuts to its corporate roles, impacting less than 1% of its workforce. This move is part of a strategic realignment announced in February, with the company aiming to boost cross-functional collaboration, which has led to redundancies.

This comes after the company's bankruptcy in 2020 and its subsequent efforts to revamp its e-commerce and brick-and-mortar operations.

While the exact financial performance of Neiman Marcus over the past three years remains unclear due to it being a private company, the recent downsizing is aimed at supporting its customer-centric retail model and key capabilities in areas like supply chain, technology, and store renovations.

Neiman Marcus cuts staff and favors cross—functional collaboration

What: London’s Oxford Street anticipates up to GBP 100 million in investments before the end of the year thanks to the rolling high-profile deals in the area.

Why it is important: The investments along with various councils which are attempting to aid in the recovery of Oxford Street, will bolster the area.

BNP Paribas Real Estate figures showed that there has been an up-to-date GBP 810 million that have already gone to retail investments in the first half of the year. This includes the GBP 103 million purchase of YSL’s flagship by Swatch Group.

Oxford Street to reportedly see GBP 100 million investment

What: Sogo & Seibu department store labour union to notify Seven & i Holdings management of strike due to the proposed sale of Sogo & Seibu to U.S fund Fortress Investment Group.

Why it is important: The deal has been postponed because of the workers’ opposition. The management meeting to decide on the sale had also been cancelled.

Seven & i department store unit to announce strike

What: Macy’s Inc reports slow consumer demand and poor financial results in Q2 but is hopeful for higher sales during the holiday season and next year.

Why it is important: Macy’s is giving insight into their outlook for the year post unideal Q2 results and how they plan to adapt to changing consumer demands as well as the economic environment.

The company reports a Q2 8% sales drop to USD 5.13 billion from USD 5.6 billion in Q2 2022, as well as a net loss of USD 22 million, compared to USD 275 million profit last year. After the release of quarterly results, Macy’s stock price fell 14%; the projected net sales for the year are still below the pre-pandemic sales figures.

Jeff Gennette, CEO and Chairman of Macy’s Inc., anticipates that the drivers of sales for the holidays will be gift offerings in beauty, merchandising revolving around the 100th anniversary of Disney, Toys “R” US in-store shops, and the Macy’s private brand, On 34th.

As customers have decreased their discretionary spending, Macy’s remains cautious especially due to the clearance of excess spring inventory.

Macy’s also announced the opening of four new small-format stores which signals an optimistic light on the company’s strategy to improve the customer experience and stay relevant as a modern department store. The small format stores ranging from 30,000 to 50,000 square feet, will be opening in Highland Grove centre in Highland, Indiana, South Bay in Boston, Arroyo Market Square in Las Vegas, and Santee Trolly Square in San Diego.

Macy’s Inc. posts Q2 declines, stays cautious on consumers 

What: John Lewis opened its online Christmas shop as online searches for Christmas offers has exponentially increased.

Why it is improtant: The company states that 30% of customers have finished their holiday shopping by the end of October and 72% researched their peak purchases online before buying.

The theme of the shop this year is nostaligia and the enchantment of Christmas which the design team has implemented in the products such as vintage prints. Last year, the company opened its Christmas shop 10 days earlier than planned due to high holiday-related searches which was over four times of those in the previous year.

John Lewis unveils online Christmas shop

What: Dior opens multiple pop-ups at Harrods to display the fall 2023 women’s collection.

Why it is important: The pop-ups will attract many visitors to the department store.

The collaboration continues Harrod’s tradition of inviting Dior to create a special installation in August when there are big-spending tourists from the U.S. and the Middle East.

After a Blockbuster Christmas Takeover, Dior Opens Summer Pop-ups at Harrods

What: For years, Hudson's Bay has been in and out of talks to buy the Neiman Marcus Group, and it's been happening again this summer. Neiman Marcus and Saks could be much stronger if they were together: the question is whether now is the right time for a merger.

Why it is important: Putting the 2 companies together could allow more efficiency, data sharing, a common customer base and more power over brands.

Business at both Saks and Neiman Marcus has been depressed this year as consumers are becoming more selective in their purchasing, shifting discretionary dollars to travel, dining and experiences. Both retailers have been cutting costs, undergone a series of layoffs in the past year, dug deeper into customer data to enhance personalization and battled each other over grabbing exclusives from designers.

Hudson’s Bay said eyeing Neiman Marcus yet again