TOKYO -- Takashimaya aims to turn profits at all overseas department stores by the year ending February 2023, including a Thai location slated to open in the fall, seeking to capitalize on Asian growth.
The Japanese retailer operates foreign department stores in Singapore, Shanghai and Ho Chi Minh City, with only the Singaporean location a moneymaker.
Black ink at all four overseas stores would mean a 1.5 billion yen ($13.5 million) profit boost, based on its forecast for the current year ending February 2019. The increase would account for a roughly 5% rise in Takashimaya's projected 30 billion yen operating profit for the current fiscal year.
Shanghai Takashimaya, opened in 2012, suffered from delays in development projects in the surrounding area as well as high administrative costs. It will likely post a seventh straight operating loss this fiscal year. But a section selling imported Japanese everyday items and handicrafts has been popular since its 2015 launch. Leveraging this success, Takashimaya aims to rake in more sales from affluent customers. It also plans to increase store card holders.
Its Ho Chi Minh City location, which opened its doors in 2016, has struggled from the start. Takashimaya aims to bolster sales by broadening offerings of everyday items for families.
Takashimaya targets profits at the Shanghai and Ho Chi Minh City stores by fiscal 2020 and fiscal 2022. Siam Takashimaya, opening in Bangkok this October, is set to be the centerpiece of a mall owned by a Thai developer. Takashimaya expects the site to be profitable in fiscal 2019, thanks to relatively low rent.
"In the long term, we seek to capitalize on Asia's growth," President Shigeru Kimoto said. Takashimaya plans to further expand its business in Southeast Asia.
The Singapore department store, opened in 1993, was Takashimaya's first location abroad and boasts an annual operating profit exceeding 3 billion yen.