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KMS comments; Marui, Lumine, Abercrombie, H&M, Forever 21, Uniqlo…..Ginza is rejuvenating. Department stores are fighting for their life, and Ginza will show if they are able to.

TOKYO (Nikkei)--Amid a spate of refurbishments, Tokyo's bustling Ginza district is turning into a battlefield for department stores hoping to attract 20- and 30-somethings, a departure from its past as the shopping hotspot for middle-aged and older women.

Mitsukoshi's expanded Ginza store offers a more varied shopping experience.
Isetan Mitsukoshi Holdings Ltd. (3099) unveiled its Mitsukoshi store in the ritzy neighborhood to the media on Wednesday after having expanded its floor space. It removed walls separating the shops, allowing customers to weave in and out of stores and browse the various brands with ease.
Tapping the expertise of group firm Isetan Co., the department store will feature a new apparel section targeting women in their 20s and 30s. A coffee shop inside the store will offer fashion information to customers' cellular phones, another gimmick intended to appeal to young people.
Sogo & Seibu Co. plans to close its Seibu store in the adjacent Yurakucho district at the end of the year, with Lumine Co. expected to open up shop in its place. Lumine is known to attract women in their 20s and 30s not only by featuring such apparel shops as United Arrows Ltd., but also for its ability to turn small fashion businesses into famous brands.
J.Front Retailing Co.'s (3086) Matsuzakaya store in Ginza will create an area just for 20-something women through renovations taking place next month.
According to an official at a major department store, the launch of low-priced apparel stores such as H&M and Uniqlo is helping draw more young people to Ginza.

KMS comments; a high Yen is giving China a competitive advantage, is this a strategy or just for Yuan stability?

TOKYO (Nikkei)―
Speculation is growing in the currency market that Chinese purchases of Japanese government bonds is accelerating the yen's rise against the dollar.
China is diversifying its portfolios of foreign currency reserves. Uncertainties over the U.S. and European economies appear to have prompted Beijing to shift the country's reserves from dollar- to yen-denominated assets.
According to Japan's Finance Ministry, China bought about 580 billion yen more in JGBs than it sold in July. Since becoming a net buyer of JGBs in January, the nation's aggregate net purchases have exceeded 2.3 trillion yen.
To stabilize the yuan, Chinese authorities have repeatedly intervened to buy dollars and sell yuans, resulting in a vast pool of forex reserves.
The yen briefly touched a 15-year, three-month high on Wednesday. Some analysts say speculators bought the Japanese currency after learning that China is pressing on with JGB purchases.

By MARIKO SANCHANTA (excerpts)
TOKYO--For decades, the model for selling luxury imported goods in Japan has been simple: plush surroundings, attentive service - and the "Japan premium." Taking advantage of the luxury-goods appetite and high incomes of Japanese consumers, foreign high-end retailers have been able to charge much more than in other markets for the same goods.
But the cozy system may be cracking, thanks in part to a surging yen - it hit a fresh 15-year-high against the dollar Tuesday - that's encouraging third-party websites to jump in with deep discounts.
Late last month, Yahoo Japan Corp. quietly launched an endaka ("strong yen") sale on its shopping portal, covering imported goods that include shoes, TaylorMade golf clubs and Coach and Gucci handbags. Coach's Heritage striped tote bag, for example, which goes for 63,000 yen (about $747), cost 25,800 yen (about $306). Yahoo says sales of the discounted goods in the week of Aug. 22-28 were five times that of the corresponding week in July.
Rakuten Ichiba, Japan's leading e-commerce site, launched a similar discount site in late August. It reported a 45% increase in sales of high-end watches compared with the corresponding July period; sales of men's imported wallets have more than doubled.
Over the years, luxury-goods retailers such as LVMH's Louis Vuitton and Chanel poured millions of dollars into building striking, massive flagship stores.
But with deflationary pressure, a weak economy and a shift in consumer tastes, sales of luxury goods in Japan have actually been on a decline. The market for imported brand items - a rough proxy for luxury goods - shrank to $9.94 billion in 2009, down 16% from 2008 and half its 1996 peak, according McKinsey. Coach, the leather-goods maker which is based in New York, said last month that its sales in Japan for fiscal 2010, which ended in July, were essentially flat on a constant-currency basis, which strips out currency fluctuations.
Still the luxury retailers have hung on to the premium - and continue to do so even as the yen has climbed to a 15-year high against the dollar and a seven-year high against the euro.
Coach's Japanese Web site sells its Kristin leather hobo bag for 59,850 yen, or about $710. In the U.S., the same bag sells for $298. A Marc Jacobs Gilda fur and sequin flap bag that sells in Japan for 249,900 yen, or $2,963, is $1,995 in the U.S.
Abercrombie & Fitch Co., the Ohio-based purveyor of preppy polos and jeans, opened its first Asian outlet in December in Tokyo; prices in some cases are double those in the U.S. A Celeste sweatshirt, for example, costs 10,800 yen, or around $128, compared with $60 in the U.S.
Online e-commerce sites are pouncing on these pricing differentials. "Thanks to the strong yen, now's your chance to buy foreign brands!" reads Yahoo Japan's strong yen sale site.

It has been said before,but part of the blame for the lack of consumption in Japan can be put squarely on the shoulders of corporations which have spent the last decade squeezing salaries and bonuses in pursuit of higher profit. While some have made substantial progress on restructuring to become more efficient, many firms have turned their gaze
to the much easier task of just cutting staff remuneration, a move made easier to justify by the fall in retail prices. Salaries have fallen by 10% in nominal terms since peaking
in 1997 according to government figures and the impact on household income is clear.
According to a report in Nikkei, Dai-ichi Life Research did research on household income over the last decade and found that the number of households with annual income of ¥8-9 million – higher than the ¥6.21 million average for households where the head is in employment – fell 18% between 2000 and 2009.
Households with incomes of ¥15 million
plus fell by 30% and ¥10-15 million by 19%.
This can partly be explained by the increase in the number of retirees but is also the result of falling incomes and bonuses.
That incomes have fallen both on average and overall is
confirmed by the startling finding that households
with income of just ¥2-3 million and ¥3-4 million increased by more than 50% in the same period.

TOKYO (Nikkei)--Fortress Investment Group LLC has all but put DaVinci Holdings KK within its grasp, now that it is poised to gain a controlling stake in the Japanese real estate fund, The Nikkei learned Thursday.
The U.S. investment fund, which is listed on the New York Stock Exchange, has purchased roughly 20.5 billion yen in loans made to DaVinci as well as equity warrants in the fund from BNP Paribas SA.
The equity warrants enable Fortress Investment to obtain 32% of the voting rights in DaVinci. The U.S. fund has also secured an option to buy shares from the firm's former president, Osamu Kaneko, that would give it an additional 27% of the voting rights.
Established in 1998 by Kaneko, DaVinci grew into the biggest real estate fund in Japan by acquiring large properties in the central Tokyo area. Its assets under management ballooned to slightly more than 1 trillion yen at one point in 2008, but its financial health deteriorated during the global financial crisis.
DaVinci fell into negative net worth in the year ended December 2009. Its stock was delisted from the Osaka Securities Exchange's Hercules start-up market last month, and Kaneko stepped down as company president on June 25.
As a major creditor, Fortress Investment has given DaVinci a two-year extension on loan repayments to help the real estate fund's rehabilitation.
Fortress Investment, which is 15% owned by Nomura Holdings Inc. (8604), believes the Japanese real estate prices have reached a reasonable level. To take advantage of the situation, the U.S. firm established a fund last month, using roughly 80 billion yen in seed money raised from domestic pension funds and others.