Isetan Mitsukoshi Holdings Report 2019
Total Page:16
File Type:pdf, Size:1020Kb
Isetan Mitsukoshi Holdings Report 2019 Integrated Report <Second edition issued December 2019> Our Philosophy Contents 02 Our Philosophy 03 About the Isetan Mitsukoshi Group 07 Top Message 13 Medium-Term Management Plan 25 Capital Policy 27 Sustainability 31 Corporate Governance 43 Financial Data 47 Non-Financial Data 55 Long-Term History of Our Challenges 57 Company Profile/ Stock Information Editorial Policy The Isetan Mitsukoshi Group has been issuing the Integrated Report since fi scal year 2018, with the aim of having all of its stakeholders, including its shareholders and investors, understand the story of its value creation, in which the Group continues to grow sustainably by taking advantage of its universal values “Our” refers to the Isetan Mitsukoshi Group itself and everyone working there. and strengths. This Report has been compiled by integrating fi nancial information and non-fi nancial “Our Philosophy” means the raison d'etre of the Isetan Mitsukoshi Group and the Group’s vision for itself. information and referring to materials including the Guidance for Collaborative Value Creation that was It is also a guiding principle to which we should always return announced by the Ministry of Economy, Trade and Industry. We will issue this Report every year, refi ning and shows how each and every individual should change. it to make it a constructive tool for dialogues with all stakeholders. 01 02 ISETAN MITSUKOSHI HOLDINGS INTEGRATED REPORT 2019 About the Isetan Mitsukoshi Group Businesses of the Isetan Mitsukoshi Group Numerical Facts About Department Store Business Real Estate Business Finance Business the Isetan Mitsukoshi Group The Isetan Mitsukoshi Group is a retail Group consisting of approximately 23,000 employees from more than 60 Group companies*1. It boasts the highest sales among department stores in Japan. It engages in business activities in four segments*2: the department store business, the sales of which account for around 80% of total sales, the credit & finance business/customer organization management business, the real estate business, and other businesses. The Group develops a wide range of store Owns excellent stores in Shinjuku, Approximately 16% of all households in The Group has the four brands of Mitsukoshi, Isetan, Iwataya, and Marui Imai, operating 22 department stores and around networks in Japan and overseas centered Nihombashi, and Ginza. Japan with an annual income of 20 million 130 small and midsize stores all over Japan and a total of 34 overseas stores, which are located mainly in China and on those in the Tokyo Metropolitan area, yen or more are MI Card members. Southeast Asia. the largest market in Japan. Connecting People and Bridging Times the Isetan Mitsukoshi Group Stores of the Isetan Mitsukoshi Group Customers Shareholders Domestic MI Card Membership Number of shareholders Approximately Approximately The four brands 3.4 220,000 Mitsukoshi Isetan million members Marui Imai Iwataya Stores in Japan department stores Employees Business Partners Local Communities / 22 in Japan Society Approximately Annual customer traffic small and Approximately 130 midsize stores 250 million Number of business partners of department stores in Japan Number of Group employees Approximately Approximately 24,000 companies 23,000 Overseas FY2018 consolidated net sales Department store business 86% Breakdown of FY2018 Credit & fi nance business consolidated /customer organization 3% 1,196.8 billion yen management business net sales by segment Ranked th among retailers in Japan Real estate business 4% 6 Overseas stores Ranked 1st among department stores in Japan Other businesses 7% 34 overseas stores 115 years after the Department Store Declaration in 1904, the Isetan 19 15 Isetan Mitsukoshi Shinko Mitsukoshi Mitsukoshi Group, which connects people and bridges times, will evolve stores stores further to become department stores in the new era that make use of the power of IT, stores, and people. *1: Including nine equity method affiliates *2: The retail & specialty store business was excluded from the business segments in FY2018. 03 04 ISETAN MITSUKOSHI HOLDINGS INTEGRATED REPORT 2019 About the Isetan Mitsukoshi Group Since its foundation, the Isetan Mitsukoshi Group has continued evolving by innovating its business models according to the changes of the times and bridging customers with goods and events. While the environment surrounding the industry has been changing rapidly, the Isetan Mitsukoshi Group will continue Process of Value Creation trying to achieve greater innovative changes than ever by taking the environmental changes as opportunities. We will create department stores in the new era by connecting our brands, customers, human resources, real estate, and domestic and overseas stores, which are our strengths, with businesses by using the power of IT, stores, and people. by the Isetan Mitsukoshi Group In addition, by responding to changing social issues and requests, we will build relationships of trust with all our stakeholders, including our customers, shareholders, investors, business partners, employees, and local communities. Through these efforts, we will enhance our corporate value and continue to grow sustainably. Management Opportunities Business Business Achievements capital Strengths and risks structure strategies Values we provide to be made Human capital Number of Group employees: approximately Reduction in the 23,000 absolute number of customers 1 Fixed capital Acceleration of bipolarization of Business model Providing Trust consumption Operating income department stores innovation a supreme in Japan and overseas: (brands) Expansion of the affluent for FY2021: population in the world customer Our Vision 56 Online experience, Rise of the Millennial Generation businesses Increase in demand from inbound both online 50.0 Sustainable growth of the Intellectual capital tourists and offline billion yen Isetan Mitsukoshi Group Brands of Mitsukoshi, Isetan, Overstore Marui Imai, and Iwataya Expertise in sales and store Customers 2 development Offline New online businesses businesses Our Philosophy Providing Department Social a new customer Connecting people and issues stores in the new experience era that make use local communities Connecting Policy Behavioral standards Human by combining the of the power of IT, Connecting a sustainable Governance resources Group’s strengths with stores, and people society and times people and Material issues digital technologies (platform operators) Real estate Improving the level of P.27 Changes in 3 business bridging times customers Expansion of employee satisfaction real estate Financial capital business Increasing Real points of Investments to be made estate Environmental during 2019 to 2021 changes caused by IT contact with ROE for FY2021 144 billion yen Limitations of retailing based on customers bricks-and-mortar stores Finance business by making effective use 5.0% Rise of e-commerce 4 of company-owned or higher Diversification of purchase and real estate Social capital Stores in payment methods Cost structure Customer base Japan and Changes in logistics and supply chains reform overseas Shift in needs from ownership to shared use Expansion of the second market Diversification of customer needs Natural capital (from goods to events and experience) ESG measures Governance / Communication 05 06 ISETAN MITSUKOSHI HOLDINGS INTEGRATED REPORT 2019 Top Message In retrospect, supermarkets appeared and joined the retail The application of digital technologies industry during that period, followed by low-price specialty offers a chance to reform our business stores called category killers. More customers wanted to model buy goods of a certain quality at low prices. As a result, I am Toshihiko Sugie, President and CEO of Isetan Mitsukoshi department stores switched to the business model of Holdings. The Isetan Mitsukoshi Group clearly set a narrowing their product lineup. This switch gradually course of actions for Group companies in Our Philosophy narrowed the customers, too. in April 2018 to mark the 10-year milestone since its We must give this situation a second look. We will formation. advance the expansion of our product categories by We announced a three-year plan (for fiscal 2019 to fiscal promoting seamless online and offline service integration. 2021) based on Our Philosophy in November 2018. We are However, the once successful approach of stocking highly aiming to transform into the future of department stores or valuable products that customers want by relying on platformers that make the most of IT, stores and people existing suppliers no longer guarantees sales. We must to offer new value to customers and move on to the next stock products based on customer demand. We must also stage of growth. take steps forward without adhering to traditional methods Customers are the Isetan Mitsukoshi Group’s greatest adopted by department stores, including transaction asset. All ages and sexes go to our stores in Japan and patterns, to introduce original shops. We should free overseas and many take advantage of the variety of ourselves from the idea of department stores in the good content we offer in areas where the Isetan Mitsukoshi old days and attempt to build a new business model. Group maintains stores and enjoys wide recognition. The promotion of seamless online and It is essential for us to continue taking steps to make our offline service integration holds the key new services and products more accessible to existing to growth strategies customers