TOKYO -- The Ebisu Mitsukoshi department store in downtown Tokyo will shut its doors as early as February 2021, in yet another blow to a Japanese retail sector already being squeezed by online competitors.
Operator Isetan Mitsukoshi Holdings made the decision Wednesday, with an official announcement planned by the end of March. The company wants to focus its resources instead on its three flagship stores -- especially with the new coronavirus expected to cool consumer spending for a long time.
Isetan Mitsukoshi is still determining whether to close the 18,000-sq.-meter store in February or March of next year. Employees will be transferred to other locations.
Ebisu Mitsukoshi opened in 1994 in Yebisu Garden Place, a major commercial complex in Tokyo, aiming to attract residents of high-rise condominiums popping up in the area.
But it bled customers as more commercial complexes opened nearby, despite renovating its cosmetics and food sections from 2017 to 2019. The facility has likely posted several million dollars in operating losses a year for the last two to three years. Isetan Mitsukoshi began negotiating a closure with the landlord two years ago.
The holding company has also shut down stores outside big cities, cutting its total number of locations to 21 from 29 in 2008.
It is now focusing on the three flagship department stores that draw wealthy customers from greater Tokyo and across Japan -- Isetan Shinjuku, Ginza Mitsukoshi and Mitsukoshi Nihonbashi. The company is renovating floor space for clothing and luxury watches at the first two locations, and devoting an additional floor to electronics retailer Bic Camera at the third as early as this summer. It is also working on an e-commerce platform for the three sites.
Existing-store sales at Japan's department stores fell for the second straight year in 2019, by 1.4%, according to the Japan Department Stores Association. Consumer sentiment has waned following the consumption-tax hike in October 2019.
Customer traffic has taken an even greater hit after the coronavirus spread worldwide. Isetan Mitsukoshi's department-store sales from March 1 to March 15 plunged roughly 38% on the year.