Global Department Store Retailing

Global Department Store Retailing published by Datamonitor in February, 2010. This report consists of 11 pages and the price starts from US $ 4795.

Introduction

Abstract

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 of this research

• 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.

Research and analysis 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.

Key reasons to purchase this research

• 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.

Table of Contents

OVERVIEW

• Summary

EXECUTIVE SUMMARY

• Main conclusions
  • Recession hastens power shift to emerging markets
  • Core market declines for the fourth time in five years
  • North American market shrinks to lowest level for eight years
  • European market reduces by 6.2% in 2009
  • Japanese market declines for 13th year running
  • Market pauses for breath in Rest of the world
  • China remains the standout region ...
  • ... but underdevelopment will not last long
  • South Korea recovers strongly, helped by discounter links
  • Australia set for renewed growth following Myer flotation
  • Emerging Asian markets ripe for development
  • The Middle East & Africa has also grown impressively
  • Latin America suffers temporary setback
  • Sales to bounce back in 2010 but longer term prospects tough in core market
  • Rest of the world will account for over half of the dollar increase in the global market size to 2014
  • Leading retailers lose market share for third year running ...
  • ... and profitability varies enormously
  • Clothing remains the dominant category for department stores
  • Cross-border expansion gathers pace

MARKET ANALYSIS

• Market definition
• Market size
• Market size by geographical region
  • North American dominance reduces
  • European performance mixed
  • Mergers fail to stabilize sector in Japan
  • China shrugs off global economic crisis
  • Performance mixed in Rest of Australasia
  • Latin American retailers continue expansion
  • Debt crisis to slow development in Middle East

• Key regional indicators
• Market breakdown by product

KEY ISSUES & OUTLOOK

• Key issues
  • International expansion
  • Franchises offer low risk rewards ...
  • ... but others prefer to directly own stores
  • Format development
  • Store renewal
  • Private and exclusive label development
  • Challenge from luxury brand stores
  • Growing threat from grocers and discounters
  • Further investment required online

• Forecast to 2014
  • Core recovers, but growth will be modest

EUROPE

• Europe - restructuring to follow overexpansion exposed by recession
• Key statistics
• European market in context
• Major players
  • El Corte Ingles
  • Marks & Spencer
  • Karstadt
  • Galeria Kaufhof
  • John Lewis
  • Debenhams
  • Galeries Lafayette
  • House of Fraser
  • Stockmann
  • Printemps

• Main drivers
  • Moderate economic revival
  • International expansion
  • Store refurbishments
  • Aging population profile

• Main inhibitors
  • Competition from value retailers
  • Merger and acquisition activity
  • Rise of luxury brand stores
  • Overexpansion

JAPAN

• Japan - effects of shrinking population will demand radical solutions
• Key statistics
• Japanese market in context
• Major players
  • Isetan Mitsukoshi
  • Sogo & Seibu
  • Takashimaya
  • J Front Retailing
  • H2O

• Main drivers
  • Mergers deliver scale benefits
  • Store investment projects under way
  • Fragile economic recovery takes hold
  • Commitment to service and quality

• Main inhibitors
  • Demographic challenges
  • Half hearted approach to cost cutting
  • High degree of store autonomy
  • Competition from specialist retailers
  • Limited funds for investment

NORTH AMERICA

• North America - competitive pressures will force store closures
• Key statistics
• North American market in context
• Major players
  • Sears
  • Macy's
  • JCPenney
  • Kohl's
  • Nordstrom
  • Dillard's

• Main drivers
  • Store portfolio expansion
  • Focus on private label
  • Instore concessions
  • Recovery in home markets

• Main inhibitors
  • Competition from specialist retailers and discounters
  • Collapse in retail sales
  • Surge in unemployment threatens recovery
  • Store closures

REST OF WORLD

• Rest of the world - rising populations and wealthier consumers drive growth
• Key statistics - China and rest of Australasia
• Key statistics - Latin America and Middle East & Africa
• China and rest of Australasia in context
• Latin America and Middle East & Africa in context
• Major players
  • Lotte
  • El Puerto de Liverpool
  • Hyundai
  • Shinsegae
  • Myer
  • Edgars

• Main drivers
  • Wealthier consumers
  • Population growth
  • Flotations facilitate development
  • Franchising

• Main inhibitors
  • Cultural and political factors
  • Competition from other formats
  • Restraints on foreign investment

COMPANY COMPARISONS

• Overview

DILLARD'S

• Reinvigorated board tackles turnaround
• Recent key events
  • Four new directors
  • Buys rest of storebuilding jv it didn't already own

• Financials
• Benchmarks
• Stores
• Outlook - pays price for poor management
  • Feuding family
  • Fresh talent in the boardroom has yet to make its mark
  • Challenge to invest unlocked capital wisely
  • Private label a source of strength

EL CORTE INGLES

• Needs to profit from recruitment of younger customers
• Recent key events
  • Opens in Salamanca and abandons Almeria in favor of El Ejido
  • Opens in Oviedo, Albacete and Seville East in 2008/09

• Financials
• Stores
• Outlook - priority for new management is recovery out of recession
  • Spanish economy central to sales revival
  • Domestic expansion to slow
  • Portugal the only international outlet
  • New management should bring fresh ideas
  • Winning back younger shoppers must be a longer term priority

ISETAN MITSUKOSHI

• Integration after merger must not reduce focus on recovery and competition
• Recent key events
  • Closes four smaller Mitsukoshi stores

• Financials
• Stores
• Outlook - recession and competition are the key issues
  • Merger will divert management attention from where it should be focused on real threats
  • Wise to invest in Tokyo
  • Retail brands must be kept distinct to best tackle competition
  • Private label development should be prioritized
  • International operations should be rationalized

JCPENNEY

• Private brands should not be overplayed
• Recent key events
  • MNG by Mango to launch in autumn 2010 ...
  • ... as Liz Claiborne moves to JCP from Macy's
  • Miracle on 33rd street
  • Rascal Flats takes American Living on tour
  • Slows store openings and accelerates Sephora rollout

• Financials
• Stores
• Outlook - exits recession in good shape to resume expansion
  • American Living launch well executed
  • JCPenney must take care not to overplay private label
  • Weathers recession better than competitors
  • Sephora tie-up works well
  • Reversion to faster store rollout likely from 2010

J FRONT RETAILING

• New store model tailors offer to local demand
• Recent key events
  • Opens Japan's third largest store in Osaka ...
  • ... but scraps plans in north and central Japan

• Financials
• Stores
• Outlook - integration will hasten recovery
  • Looks short of target
  • New model more attractive
  • Initiatives have yet to deliver
  • Integration ahead of schedule

KOHL'S

• Should slow advance of private and exclusive labels
• Recent key events
  • LC Lauren Conrad
  • New chairman
  • Opens 37 stores in a day
  • Opens in Anchorage
  • Jumping Beans

• Financials
• Benchmarks
• Stores
• Outlook - performs well thanks to clear strategy
  • Value credentials support sales in recession
  • Benefits from clear strategic direction
  • Will seek further expansion - but at a slower rate while it modernizes existing stores
  • Kohl's should slow the advance of private and exclusive labels

MACY'S

• Needs to win back customers and restore profits via closure program
• Recent key events
  • Dubai opening imminent
  • Moody's downgrades Macy's credit rating
  • Restructuring creates 1,200 jobs
  • $5.4bn May writedown
  • Space NK
  • $75m DC in Arizona replaces Chicago center

• Financials
• Benchmarks
• Stores
• Outlook - localization may not be the route to maximum sales
  • Recession hits Macy's hard
  • Localization initiative shows encouraging early results, but may not be the solution
  • Private label strengths eroded in changed marketplace
  • Store closure program should be bolder
  • Macy's needs to win back former customers

MARKS & SPENCER

• Furthest developed of Top 12 in international expansion
• Recent key events
  • Marc Bolland becomes CEO
  • Carl Leaver leaves
  • Doing the right thing
  • Green credentials

• Financials
• Benchmarks
• Stores
• Outlook - ranges not yet fully in tune with aspirations of core 45+ audience
  • International business copes well with economic downturn
  • Womenswear recovery essential for UK revival
  • Brand segmentation still a problem
  • Homewares performs well
  • Investment cut
  • Profitability under further pressure

NORDSTROM

• Hit hard by recession but could broaden reach through private label
• Recent key events
  • Jewelry tie-up with film
  • Renews borrowing
  • Double reward points

• Financials
• Benchmarks
• Stores
• Outlook - scope for expansion including international
  • With such an overt premium positioning, Nordstrom has been hit hard by the downturn
  • Nordstrom has much more scope for expansion than its larger rivals
  • Private label development should be pursued more vigorously

SEARS

• Needs to invest in some stores and close others to restore image and profits
• Recent key events
  • Beauty for younger women
  • Plugs gap in toys
  • Closures
  • Interim CEO
  • Restructures

• Financials
• Benchmarks
• Stores
• Outlook - failure to invest is a strategy that needs to be reversed
  • Poorly equipped to deal with recession
  • Own brands through third parties would ultimately worsen Sears' performance
  • Failure to appoint permanent CEO handicaps the business
  • Needs to downsize Sears estate to restore profitability

SOGO & SEIBU

• Recession sparks urgency for changes that are years overdue
• Recent key events
  • Restructuring
  • Sogo flagship in Osaka sold for $370m
  • Seibu puts gloss on image of Seven Premium food

• Financials
• Stores
• Outlook - Restructure should provide new focus
  • Sense of urgency in reaction to recession
  • Is Sogo & Seibu and Seven & i the right fit?
  • Another tough year
  • Specialty fascias should raise footfall

TAKASHIMAYA

• Merger with H2O could be speeded up
• Recent key events
  • Uniqlo
  • Shanghai
  • Merger with H2O

• Financials
• Benchmarks
• Stores
• Outlook - strategic fit with H2O is compelling
  • Premium positioning exposes Takashimaya to the full force of the recession
  • Merger with H2O could be speeded up
  • Uniqlo tie-up carries risks
  • Should use lower cost refurbishment
  • Growth opportunities strongest overseas

APPENDIX

• Statistical notes
• Regional classification
• Abbreviations
• Ask the analyst
• Verdict consulting
• Disclaimer

TABLES

• Table: Main world regional categories 2009
• Table: Global department store market size 2004-2009e
• Table: Global department store market size by region 2004-2009e
• Table: Regional market growth rates by region 2005-2009e and 2009e on 2004
• Table: Key indicators by region 2009e
• Table: Key space indicators by region (sq ft) 2009e
• Table: Global department stores product category share 2004-2009e
• Table: International store portfolios 2009
• Table: Global department store market size by region 2009-2014
• Table: Department store market growth 2004-2009 and 2009-2014
• Table: European market overview 2010
• Table: European department store market 2004-2009e
• Table: European department store market 2004-2009e
• Table: European department store market shares 2004-2009e
• Table: European key players overview 2009
• Table: European key players market shares 2009e
• Table: Japanese market overview 2010
• Table: Japanese department store market 2004-2009e
• Table: Japanese department store market shares 2004-2009e
• Table: Japanese key players overview 2009
• Table: Japanese key players market shares 2009e
• Table: North American market overview 2010
• Table: North American department store market 2004-2009e
• Table: North American department store market shares 2004-2009e
• Table: North American key players overview 2009
• Table: North American key players market shares 2009e
• Table: US and Canadian retail sales 2004-2009e
• Table: Rest of the world overview 2009
• Table: China department store market 2004-2009e
• Table: Rest of Australasia department store market 2004-2009e
• Table: Latin America department store market 2004-2009e
• Table: Middle East & Africa department store market 2004-2009e
• Table: China and rest of Australasia market shares 2004-2009e
• Table: Latin America and Middle East & Africa market shares 2004-2009e
• Table: Rest of world key players overview 2009
• Table: Developing markets index of * GDP per capita 2004-2009e
• Table: Developing markets population 2004-2009e
• Table: Top department stores global market shares 2004-2009e
• Table: Top 12 department stores key performance indicators 2008/09
• Table: Dillard's company overview 2010
• Table: Dillard's trading record 2004-2009
• Table: Dillard's benchmarks, year to January 2008 and 2009
• Table: Dillard's store portfolio 2004-2009
• Table: El Corte Ingles company overview 2010
• Table: El Corte Ingles trading record 2004-2009
• Table: El Corte Ingles benchmarks, year to February 2008 & 2009
• Table: El Corte Ingles store portfolio 2004-2009
• Table: Isetan Mitsukoshi company overview 2010
• Table: Isetan Mitsukoshi trading record 2004-2009
• Table: Isetan trading record 2004-2008
• Table: Isetan Mitsukoshi benchmarks, year to February 2008 & 2009
• Table: Mitsukoshi store portfolio 2004-2009
• Table: JCPenney company overview 2010
• Table: JCPenney trading record 2004-2009
• Table: JCPenney benchmarks, year to January 2008 and 2009
• Table: JCPenney store portfolio 2004-2009
• Table: J Front Retailing company overview 2010
• Table: J Front Retailing trading record 2004-2009
• Table: J Front Retailing benchmarks, year to February 2008 & 2009
• Table: J Front Retailing store portfolio 2004-2009
• Table: Kohl's company overview 2010
• Table: Kohl's trading record 2004-2009
• Table: Kohl's benchmarks, year to January 2008 and 2009
• Table: Kohl's store portfolio 2004-2009
• Table: Macy's company overview 2010
• Table: Macy's trading record 2004-2009
• Table: Macy's benchmarks year ending January 2008 and 2009
• Table: Macy's store portfolio 2004-2009
• Table: Marks & Spencer company overview 2010
• Table: Marks & Spencer trading record £m 2004-2009
• Table: Marks & Spencer benchmarks, year to March 2008 & 2009
• Table: Marks & Spencer store portfolio 2004-2009
• Table: Marks & Spencer international store portfolio September 2009
• Table: Nordstrom company overview 2010
• Table: Nordstrom trading record 2004-2009
• Table: Nordstrom benchmarks, year to January 2008 and 2009
• Table: Nordstrom store portfolio 2004-2009
• Table: Sears company overview 2010
• Table: Sears trading record 2004-2009
• Table: Sears benchmarks, year to January 2008 and 2009
• Table: Sears store portfolio 2007/08 and 2008/09
• Table: Sears store portfolio 2004-2009
• Table: Sogo & Seibu company overview 2010
• Table: Sogo trading record 2005-2009
• Table: Seibu trading record 2005-2009
• Table: Sogo & Seibu trading record 2005-2009
• Table: Sogo & Seibu benchmarks, year to February 2008 & 2009
• Table: Sogo & Seibu store portfolio 2005-2009
• Table: Takashimaya company overview 2010
• Table: Takashimaya trading record 2004-2009
• Table: Takashimaya Benchmarks, year to February 2008 & 2009
• Table: Takashimaya store portfolio 2004-2009

FIGURES

• Figure: Global department store market regional share 2004 and 2009e
• Figure: Global department store market split by region 2004-2009e
• Figure: Global department store product category share trend 2004-09e
• Figure: Index of GDP (Purchasing Power Parity) 2004-2014
• Figure: Index of Population 2004-2014
• Figure: Japan population change (millions) 2010-2020
• Figure: US and Canadian unemployment 2005-2009e

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