Mitsukoshi, the iconic Japanese department store operator, plans to slash its workforce by about one-sixth to cope with dwindling demand for luxury goods, a newspaper reported yesterday.
The firm, part of Isetan Mitsukoshi Holdings Ltd, will axe about 1,000 jobs by next March through a voluntary retirement program — the biggest round of cutbacks yet for the troubled industry, the Nikkei Shimbun business daily said.
A company spokesman, however, denied the report, saying: “We have no such plans.”
Mitsukoshi, which is often compared to Britain’s Harrods or US-based Bloomingdale’s, will shoulder costs by selling one of its stores in Tokyo that closed in May, the Nikkei reported.
Isetan for its part will scrap dozens of jobs, it said without citing sources.
Despite their famous basement foodhalls, dozens of make-up girls and floor after floor of designer label clothing along with traditional kimonos, Japanese department stores have suffered a sales slump over the past decade.
An aging population and the worst recession in decades have made Japanese consumers more thrifty and have taken a heavy toll on Japan’s department stores.
Sales at Mitsukoshi, which employs 6,200 workers and even has a metro station named after it in Tokyo, fell nearly 10 percent to ¥657.1 billion (US$7 billion) in the financial year to March.
The company is trying to turn its business around through restructuring. It closed its Osaka site and other locations in 2005 and tied up with rival Isetan last year, creating the country’s largest department store operator by sales.
Mitsukoshi, which started out in 1673 selling kimonos, operates 14 stores in Japan along with additional outlets in Asia, Europe and the US.
Isetan owns 10 department stores in Japan and also has branches elsewhere in Asia.
Faced with a sluggish domestic market, many Japanese retailers are eyeing overseas markets such as China, where consumption by a burgeoning middle-class is set to explode in coming years.
Isetan Mitsukoshi reportedly plans to open five new outlets in China by 2014 to double its network in the country.
Shares of Isetan-Mitsukoshi closed up 1.5 percent at ¥1,035.
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