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Companies

Nomura to shutter 20% of Japan retail sites as losses mount

Financial group plans to downsize European operations

Nomura Holdings is shutting down over 30 retail locations, most of them in the Tokyo area.   © Reuters

TOKYO -- Nomura Holdings is leaving no stone unturned in its wide-ranging restructuring drive with plans to shut down about 20% of its Japanese 156 retail branches, previously considered a sacred cow by the financial group.

Nomura logged a 101.2 billion yen ($908 million) loss for the April-December period, its largest since the global financial crisis in 2008. While much of the blow came from impairment losses at American units bought after the crisis, domestic retail operations, which had been making up for losses abroad, are starting to lose steam as well.

"The traditional business model has reached an inflection point," Chief Financial Officer Takumi Kitamura said at an earnings announcement in February.

The company is now making sweeping changes to revive earning power. As a first step, over 30 retail sites mainly in the Tokyo area will be closed or merged in order to cut fixed costs.

A newly created digital strategy team will also work across departmental lines to draw up a marketing strategy, a departure from the more top-down approach of the past. Nomura is eager to bolster its online services, which are not as strong as competitors'.

To further curb administrative expenses, Nomura will streamline its 11 back-office departments into about half that number, and revisit its policy of maintaining hubs in Japan, the U.S. and Europe. It will downsize its operations based in London and will not be appointing a European head.

Although the April-December loss has served as a wake-up call for Nomura's leadership, it will take time for changes to make their way through the group's sprawling businesses. It remains unclear whether the entire company can get on the same page.

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