October 27, 2016 10:50 pm JST

Japan's Isetan Mitsukoshi goes upscale with new Malaysia store

CK TAN, Nikkei staff writer

The Isetan specialty store in Kuala Lumpur also offers visitors a trial with Honda's Asimo robotic chair.

KUALA LUMPUR -- Isetan Mitsukoshi, a Japanese department store operator, has departed from convention in opening its first overseas concept store in the Malaysian capital Thursday.

Featuring not only high-end Japanese brand merchandise, Isetan The Japan Store Kuala Lumpur also includes a "museum" that showcases fashion, arts and technology, offering customers a new way to experience the country.

"It makes you feel like you are in Japan," said shopper Nina Chantelle

The six-story emporium opened in the Lot 10 mall, where Isetan opened its first department store in Malaysia in 1990.

Working with the Cool Japan Fund, a government-run organization that promotes Japan's creative industries, the 11,000-sq.-meter store underwent a complete renovation designed to highlight the country's craftsmanship. Architects and designers were brought in from Japan to create a unique layout that reflects wa no kokoro -- the Japanese spirit of harmony with nature.

Every section of the store has a round layout done in subdued colors meant to evoke Japan's Heian period (794-1185).

Changing with the times

"The market has changed remarkably in the past 26 years," said Hiroshi Ohnishi, Isetan's president and CEO, in an interview.

He said that as Malaysia has developed, the concept of the department store, which initially targeted the middle class, has taken a back seat as incomes have risen and fast fashion brands have proliferated. The Isetan store that opened in the Suria KLCC mall in Petronas Twin Towers was triple the size of the first store. It aimed to appeal to Malaysia's growing middle class.

But to cater to those who have moved from the middle class into the upper income group, with their higher expectations, Isetan adjusted its strategy by introducing specialty stores.

Although Isetan also has a presence in more affluent Singapore and Thailand, Ohnishi said the floor size at its wholly owned Lot 10 outlet was the ideal space to become a store that incorporates concepts ranging from virtual galleries to fine dining, all under one roof.

There is also an upmarket supermarket, cafe, reading corner, beauty salons and "sleep room" where people can try out mattresses. For those who want to try their hand at flower arrangement or tea ceremony, there are classes conducted by experts from Japan.

"It's all right, even if we do not have [many] goods to offer. But in exchange, we let customers experience the Japanese culture and services here," said Ohnishi.

The product lineup is, in fact, extensive. It consists of about 800 brands, mainly from Japan, along with some trendy, locally designed goods. The items on offer are generally not cheap: a toy robot toy made by Gundam Mastermind costs about 900 ringgit ($215); designer T-shirts range in price from a few hundred ringgit to several thousand.

The hefty price tags seem not to have deterred shoppers. "It's fairly agreeable," said Lukman Azman, a 25-year-old information technology worker, when asked what he thought of paying 3,127 ringgit for a Mirai Suenaga "smart doll" created by Danny Choo. "It is very nice and detailed, like a real person."

"It's not about the price, but quality," said a woman in her 50s who was looking at household products. She said the goods she has bought from Isetan over the years tend to last longer.

The store is 51% owned by Isetan of Japan, the local unit of Isetan Mistsukoshi, with the Cool Japan Fund owning the rest. It has a paid-in capital of 2 billion yen ($19.7 million).

"We would like to take between three to six months to observe the performance of the store before deciding on the next country to introduce specialty stores [in]," said Ohnishi, citing Singapore and Thailand as possible locations.

The outlet's location in the Bukit Bintang district has drawn a fair number of foreign tourists. "It has a lot of good stuff," said Mustafa al-Salman, 22, from Saudi Arabia, who was in Malaysia with his wife on their honeymoon.

With the country's economy struggling with weak commodity prices and a weakening currency, it is uncertain whether the store can find its footing. Ohnishi, however, was confident. "The store is the answer to fulling sophisticated customers [needs] and our strategy, going forward." 

Nikkei staff writers Yukako Ono and Minami Inoue contributed to this article.

Isetan Mitsukoshi Holdings Ltd.

Japan

Market(Ticker): TKS(3099)
Sector:
Industry:
Retail Trade
Department Stores
Market cap(USD): 3,955.86M
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