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Japan department stores upbeat on tax-free sales as tourists return

Skin care products driving recovery, but apparel remains a liability

Shoppers fill the cosmetics department at Takashimaya's Osaka location.

TOKYO -- Cosmetics are propelling a rebound in sales of tax-free goods at Japanese department stores, many of which see foreign visitors regaining the urge to spend.

Nearly half, or 48%, of department stores surveyed by The Nikkei expect tax-free sales to grow in fiscal 2017, compared to just 3.9% that are forecasting declines. Tax-free sales slowed in fiscal 2016 as tourist spending shifted from luxury goods to cheaper consumables and headline-making shopping sprees by Chinese visitors waned.  

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