Global Department Store Retailing

Introduction

This report provides comprehensive coverage of the global department store market with analysis segmented into Europe, North America, Japan and the Rest of the World. It provides regional market values, product shares, insight into the main regional players and analysis of key market drivers and inhibitors. It also provides comprehensive profiles of the Top 12 global department store retailers.

Scope

*Value of the department store sector in North America, Europe, Japan, Latin America, China, MEA and the rest of Australasia with forecasts to 2014.

*Profiles of the Top 12 retailers including details of current and future strategies, sales performance, store numbers and other operating data to 2009.

*A dedicated chapter for each region inclusive of sales, store numbers, space as well as insight into the main players and key regional sector trends.

Highlights

The global department store market shrank by 4% in 2009 (to $343bn), pulled down by falls of over 6% in North America and Europe where consumers have reacted to the rising tide of unemployment, smaller bonus payments and falling asset prices by reducing non-essential expenditure and switching to more value-orientated retailers.

With opportunities for further stores often limited in mature developed markets, an increasing number of operators aim to build an international presence. The fastest expansion is being achieved by those using franchises, such as Debenhams and Marks & Spencer. Others prefer a more direct approach with whole- or part-ownership of new stores.

Despite dampened growth in 2009, we expect sales to bounce back in 2010, with many emerging Asian markets ripe for development. Department store operators still tend to be regionally based and offer huge scope for further growth to meet the demands of an increasingly affluent and aspirational urban population in countries such as China.

Reasons to Purchase

*Plan international expansion effectively and assess which countries have the best growth potential whether you are a retailer or a sector supplier.

*Formulate market share objectives for your company and track progress using the detailed financial and operating data for leading department stores.

*Review the strategies of competitors and develop plans that respond to the opportunities and threats facing the department store sector in your region.


Report Highlights

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Overview 1
Summary 1
Executive Summary 2
Main conclusions 2
Recession hastens power shift to emerging markets 2
Core market declines for the fourth time in five years 2
North American market shrinks to lowest level for eight years 2
European market reduces by 6.2% in 2009 2
Japanese market declines for 13th year running 2
Market pauses for breath in Rest of the world 3
China remains the standout region ... 3
... but underdevelopment will not last long 3
South Korea recovers strongly, helped by discounter links 3
Australia set for renewed growth following Myer flotation 3
Emerging Asian markets ripe for development 4
The Middle East & Africa has also grown impressively 4
Latin America suffers temporary setback 4
Sales to bounce back in 2010 but longer term prospects tough in core market 4
Rest of the world will account for over half of the dollar increase in the global market size to 2014 4
Leading retailers lose market share for third year running ... 5
... and profitability varies enormously 5
Clothing remains the dominant category for department stores 5
Cross-border expansion gathers pace 5
Table of Contents 6
Table of figures 7
Table of tables 8
CHAPTER 1 MARKET ANALYSIS 9
Market definition 9
Market size 10
Market size by geographical region 12
North American dominance reduces 13
European performance mixed 13
Mergers fail to stabilize sector in Japan 13
China shrugs off global economic crisis 13
Performance mixed in Rest of Australasia 14
Latin American retailers continue expansion 14
Debt crisis to slow development in Middle East 15
Key regional indicators 15
Market breakdown by product 17
CHAPTER 2 KEY ISSUES & OUTLOOK 19
Key issues 19
International expansion 19
Franchises offer low risk rewards ... 19
... but others prefer to directly own stores 20
Format development 21
Store renewal 21
Private and exclusive label development 22
Challenge from luxury brand stores 23
Growing threat from grocers and discounters 24
Further investment required online 24
Forecast to 2014 26
Core recovers, but growth will be modest 27
CHAPTER 3 EUROPE 30
Europe - restructuring to follow overexpansion exposed by recession 30
Key statistics 30
European market in context 32
Major players 33
El Corte Inglés 34
Marks & Spencer 34
Karstadt 34
Galeria Kaufhof 34
John Lewis 35
Debenhams 35
Galeries Lafayette 35
House of Fraser 35
Stockmann 36
Printemps 36
Main drivers 37
Moderate economic revival 37
International expansion 37
Store refurbishments 37
Aging population profile 37
Main inhibitors 38
Competition from value retailers 38
Merger and acquisition activity 38
Rise of luxury brand stores 38
Overexpansion 38
CHAPTER 4 JAPAN 39
Japan - effects of shrinking population will demand radical solutions 39
Key statistics 39
Japanese market in context 40
Major players 41
Isetan Mitsukoshi 41
Sogo & Seibu 42
Takashimaya 42
J Front Retailing 42
H2O 42
Main drivers 43
Mergers deliver scale benefits 43
Store investment projects under way 43
Fragile economic recovery takes hold 43
Commitment to service and quality 43
Main inhibitors 44
Demographic challenges 44
Half hearted approach to cost cutting 44
High degree of store autonomy 45
Competition from specialist retailers 45
Limited funds for investment 45
CHAPTER 5 NORTH AMERICA 46
North America - competitive pressures will force store closures 46
Key statistics 46
North American market in context 47
Major players 48
Sears 48
Macy's 49
JCPenney 49
Kohl's 49
Nordstrom 49
Dillard's 50
Main drivers 50
Store portfolio expansion 50
Focus on private label 50
Instore concessions 50
Recovery in home markets 50
Main inhibitors 51
Competition from specialist retailers and discounters 51
Collapse in retail sales 51
Surge in unemployment threatens recovery 52
Store closures 52
CHAPTER 6 REST OF WORLD 53
Rest of the world - rising populations and wealthier consumers drive growth 53
Key statistics - China and rest of Australasia 53
Key statistics - Latin America and Middle East & Africa 56
China and rest of Australasia in context 58
Latin America and Middle East & Africa in context 59
Major players 60
Lotte 60
El Puerto de Liverpool 61
Hyundai 61
Shinsegae 61
Myer 62
Edgars 62
Main drivers 63
Wealthier consumers 63
Population growth 64
Flotations facilitate development 64
Franchising 65
Main inhibitors 65
Cultural and political factors 65
Competition from other formats 65
Restraints on foreign investment 65
CHAPTER 7 Company Comparisons 66
Overview 66
CHAPTER 8 Dillard's 69
Reinvigorated board tackles turnaround 69
Recent key events 70
Four new directors 70
Buys rest of storebuilding jv it didn't already own 70
Financials 70
Benchmarks 71
Stores 72
Outlook - pays price for poor management 73
Feuding family 73
Fresh talent in the boardroom has yet to make its mark 73
Challenge to invest unlocked capital wisely 73
Private label a source of strength 73
CHAPTER 9 El Corte Inglés 74
Needs to profit from recruitment of younger customers 74
Recent key events 75
Opens in Salamanca and abandons Almeria in favor of El Ejido 75
Opens in Oviedo, Albacete and Seville East in 2008/09 76
Financials 76
Benchmarks 77
Stores 78
Outlook - priority for new management is recovery out of recession 79
Spanish economy central to sales revival 79
Domestic expansion to slow 79
Portugal the only international outlet 79
New management should bring fresh ideas 79
Winning back younger shoppers must be a longer term priority 79
CHAPTER 10 Isetan Mitsukoshi 80
Integration after merger must not reduce focus on recovery and competition 80
Recent key events 81
Closes four smaller Mitsukoshi stores 81
Financials 82
Benchmarks 83
Stores 84
Outlook - recession and competition are the key issues 85
Merger will divert management attention from where it should be focused on real threats 85
Wise to invest in Tokyo 85
Retail brands must be kept distinct to best tackle competition 85
Private label development should be prioritized 85
International operations should be rationalized 85
CHAPTER 11 JCPenney 86
Private brands should not be overplayed 86
Recent key events 88
MNG by Mango to launch in autumn 2010 ... 88
... as Liz Claiborne moves to JCP from Macy's 88
Miracle on 33rd street 88
Rascal Flats takes American Living on tour 88
Slows store openings and accelerates Sephora rollout 88
Financials 89
Benchmarks 90
Stores 91
Outlook - exits recession in good shape to resume expansion 92
American Living launch well executed 92
JCPenney must take care not to overplay private label 92
Weathers recession better than competitors 92
Sephora tie-up works well 92
Reversion to faster store rollout likely from 2010 92
CHAPTER 12 J Front Retailing 93
New store model tailors offer to local demand 93
Recent key events 94
Opens Japan's third largest store in Osaka ... 94
... but scraps plans in north and central Japan 94
Financials 95
Benchmarks 96
Stores 97
Outlook - integration will hasten recovery 98
Looks short of target 98
New model more attractive 98
Initiatives have yet to deliver 98
Integration ahead of schedule 98
CHAPTER 13 Kohl's 99
Should slow advance of private and exclusive labels 99
Recent key events 100
LC Lauren Conrad 100
New chairman 100
Opens 37 stores in a day 100
Opens in Anchorage 101
Jumping Beans 101
Financials 101
Benchmarks 102
Stores 103
Outlook - performs well thanks to clear strategy 104
Value credentials support sales in recession 104
Benefits from clear strategic direction 104
Will seek further expansion - but at a slower rate while it modernizes existing stores 104
Kohl's should slow the advance of private and exclusive labels 104
CHAPTER 14 Macy's 105
Needs to win back customers and restore profits via closure program 105
Recent key events 107
Dubai opening imminent 107
Moody's downgrades Macy's credit rating 107
Restructuring creates 1,200 jobs 107
$5.4bn May writedown 107
Space NK 107
$75m DC in Arizona replaces Chicago center 107
Financials 108
Benchmarks 109
Stores 110
Outlook - localization may not be the route to maximum sales 111
Recession hits Macy's hard 111
Localization initiative shows encouraging early results, but may not be the solution 111
Private label strengths eroded in changed marketplace 111
Store closure program should be bolder 111
Macy's needs to win back former customers 111
CHAPTER 15 Marks & Spencer 112
Furthest developed of Top 12 in international expansion 112
Recent key events 113
Marc Bolland becomes CEO 113
Carl Leaver leaves 113
Doing the right thing 113
Green credentials 113
Financials 114
Benchmarks 115
Stores 116
Outlook - ranges not yet fully in tune with aspirations of core 45+ audience 117
International business copes well with economic downturn 117
Womenswear recovery essential for UK revival 118
Brand segmentation still a problem 118
Homewares performs well 118
Investment cut 118
Profitability under further pressure 118
CHAPTER 16 Nordstrom 119
Hit hard by recession but could broaden reach through private label 119
Recent key events 120
Jewelry tie-up with film 120
Renews borrowing 120
Double reward points 120
Financials 121
Benchmarks 122
Stores 123
Outlook - scope for expansion including international 124
With such an overt premium positioning, Nordstrom has been hit hard by the downturn 124
Nordstrom has much more scope for expansion than its larger rivals 124
Private label development should be pursued more vigorously 124
CHAPTER 17 Sears 125
Needs to invest in some stores and close others to restore image and profits 125
Recent key events 127
Beauty for younger women 127
Plugs gap in toys 127
Closures 127
Interim CEO 127
Restructures 127
Financials 128
Benchmarks 129
Stores 129
Outlook - failure to invest is a strategy that needs to be reversed 131
Poorly equipped to deal with recession 131
Own brands through third parties would ultimately worsen Sears' performance 131
Failure to appoint permanent CEO handicaps the business 131
Needs to downsize Sears estate to restore profitability 131
CHAPTER 18 Sogo & Seibu 132
Recession sparks urgency for changes that are years overdue 132
Recent key events 133
Restructuring 133
Sogo flagship in Osaka sold for $370m 133
Seibu puts gloss on image of Seven Premium food 133
Financials 134
Benchmarks 136
Stores 137
Outlook - Restructure should provide new focus 138
Sense of urgency in reaction to recession 138
Is Sogo & Seibu and Seven & i the right fit? 138
Another tough year 138
Specialty fascias should raise footfall 138
CHAPTER 19 Takashimaya 139
Merger with H2O could be speeded up 139
Recent key events 140
Uniqlo 140
Shanghai 140
Merger with H2O 140
Financials 140
Benchmarks 142
Stores 143
Outlook - strategic fit with H2O is compelling 144
Premium positioning exposes Takashimaya to the full force of the recession 144
Merger with H2O could be speeded up 144
Uniqlo tie-up carries risks 144
Should use lower cost refurbishment 144
Growth opportunities strongest overseas 144
APPENDIX 145
Statistical notes 145
Regional classification 146
Abbreviations 147
Ask the analyst 147
Verdict consulting 147
Disclaimer 147
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List of Tables
Table 1: Main world regional categories 2009 9
Table 2: Global department store market size 2004-2009e 10
Table 3: Global department store market size by region 2004-2009e 12
Table 4: Regional market growth rates by region 2005-2009e and 2009e on 2004 12
Table 5: Key indicators by region 2009e 15
Table 6: Key space indicators by region (sq ft) 2009e 16
Table 7: Global department stores product category share 2004-2009e 17
Table 8: International store portfolios 2009 20
Table 9: Global department store market size by region 2009-2014 28
Table 10: Department store market growth 2004-2009 and 2009-2014 28
Table 11: European market overview 2010 30
Table 12: European department store market 2004-2009e 30
Table 13: European department store market 2004-2009e 31
Table 14: European department store market shares 2004-2009e 32
Table 15: European key players overview 2009 33
Table 16: European key players market shares 2009e 33
Table 17: Japanese market overview 2010 39
Table 18: Japanese department store market 2004-2009e 39
Table 19: Japanese department store market shares 2004-2009e 40
Table 20: Japanese key players overview 2009 41
Table 21: Japanese key players market shares 2009e 41
Table 22: North American market overview 2010 46
Table 23: North American department store market 2004-2009e 46
Table 24: North American department store market shares 2004-2009e 47
Table 25: North American key players overview 2009 48
Table 26: North American key players market shares 2009e 48
Table 27: US and Canadian retail sales 2004-2009e 51
Table 28: Rest of the world overview 2009 53
Table 29: China department store market 2004-2009e 53
Table 30: Rest of Australasia department store market 2004-2009e 54
Table 31: Latin America department store market 2004-2009e 56
Table 32: Middle East & Africa department store market 2004-2009e 57
Table 33: China and rest of Australasia market shares 2004-2009e 58
Table 34: Latin America and Middle East & Africa market shares 2004-2009e 59
Table 35: Rest of world key players overview 2009 60
Table 36: Developing markets index of * GDP per capita 2004-2009e 63
Table 37: Developing markets population 2004-2009e 64
Table 38: Top department stores global market shares 2004-2009e 66
Table 39: Top 12 department stores key performance indicators 2008/09 67
Table 40: Dillard's company overview 2010 69
Table 41: Dillard's trading record 2004-2009 70
Table 42: Dillard's benchmarks, year to January 2008 and 2009 71
Table 43: Dillard's store portfolio 2004-2009 72
Table 44: El Corte Inglés company overview 2010 74
Table 45: El Corte Inglés trading record 2004-2009 76
Table 46: El Corte Inglés benchmarks, year to February 2008 & 2009 77
Table 47: El Corte Inglés store portfolio 2004-2009 78
Table 48: Isetan Mitsukoshi company overview 2010 80
Table 49: Isetan Mitsukoshi trading record 2004-2009 82
Table 50: Isetan trading record 2004-2008 82
Table 51: Isetan Mitsukoshi benchmarks, year to February 2008 & 2009 83
Table 52: Mitsukoshi store portfolio 2004-2009 84
Table 53: JCPenney company overview 2010 86
Table 54: JCPenney trading record 2004-2009 89
Table 55: JCPenney benchmarks, year to January 2008 and 2009 90
Table 56: JCPenney store portfolio 2004-2009 91
Table 57: J Front Retailing company overview 2010 93
Table 58: J Front Retailing trading record 2004-2009 95
Table 59: J Front Retailing benchmarks, year to February 2008 & 2009 96
Table 60: J Front Retailing store portfolio 2004-2009 97
Table 61: Kohl's company overview 2010 99
Table 62: Kohl's trading record 2004-2009 101
Table 63: Kohl's benchmarks, year to January 2008 and 2009 102
Table 64: Kohl's store portfolio 2004-2009 103
Table 65: Macy's company overview 2010 105
Table 66: Macy's trading record 2004-2009 108
Table 67: Macy's benchmarks year ending January 2008 and 2009 109
Table 68: Macy's store portfolio 2004-2009 110
Table 69: Marks & Spencer company overview 2010 112
Table 70: Marks & Spencer trading record £m 2004-2009 114
Table 71: Marks & Spencer benchmarks, year to March 2008 & 2009 115
Table 72: Marks & Spencer store portfolio 2004-2009 116
Table 73: Marks & Spencer international store portfolio September 2009 117
Table 74: Nordstrom company overview 2010 119
Table 75: Nordstrom trading record 2004-2009 121
Table 76: Nordstrom benchmarks, year to January 2008 and 2009 122
Table 77: Nordstrom store portfolio 2004-2009 123
Table 78: Sears company overview 2010 125
Table 79: Sears trading record 2004-2009 128
Table 80: Sears benchmarks, year to January 2008 and 2009 129
Table 81: Sears store portfolio 2007/08 and 2008/09 129
Table 82: Sears store portfolio 2004-2009 130
Table 83: Sogo & Seibu company overview 2010 132
Table 84: Sogo trading record 2005-2009 134
Table 85: Seibu trading record 2005-2009 134
Table 86: Sogo & Seibu trading record 2005-2009 135
Table 87: Sogo & Seibu benchmarks, year to February 2008 & 2009 136
Table 88: Sogo & Seibu store portfolio 2005-2009 137
Table 89: Takashimaya company overview 2010 139
Table 90: Takashimaya trading record 2004-2009 141
Table 91: Takashimaya Benchmarks, year to February 2008 & 2009 142
Table 92: Takashimaya store portfolio 2004-2009 143
List of Figures
Figure 1: Global department store market regional share 2004 and 2009e 11
Figure 2: Global department store market split by region 2004-2009e 14
Figure 3: Global department store product category share trend 2004-09e 18
Figure 4: Index of GDP (Purchasing Power Parity) 2004-2014 26
Figure 5: Index of Population 2004-2014 27
Figure 6: Japan population change (millions) 2010-2020 44
Figure 7: US and Canadian unemployment 2005-2009e 52
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