TOKYO -- Takashimaya is aiming to have all 17 of its domestic department stores turn an operating profit for the first time in 22 years in fiscal 2018, in part by cutting labor costs through transfers of employees from struggling regional sites to flagship locations in major cities.
Six department stores posted red ink last fiscal year ended in February, including stores in Gifu and Tottori prefectures and one in Tachikawa on the outskirts of Tokyo. Despite brisk sales at flagship stores from rising consumption by visitors to Japan and wealthier customers, regional and suburban locations have performed poorly amid competition from online sales and specialty shops.
Takashimaya expects Gifu to be the only unprofitable store at the end of this fiscal year. The Tottori location is poised to turn its first profit in four years after staying open an hour less since September 2016 in addition to reducing utility bills. Two buildings will also be consolidated soon into one.
In September, about 50 personnel were transferred from Tachikawa to Shinjuku and other flagship locations. Furniture retailer Nitori Holdings was also brought in as a tenant to boost rent revenue at Tachikawa.
"We take into account not only management efficiency but also employment and our coexistence with the communities," said President Shigeru Kimoto.
The Osaka-based company also plans to open a new building for its famed Nihombashi store in central Tokyo. Takashimaya hopes to boost revenue by growing flagship locations and lowering costs at unprofitable regional stores.