Department Stores and Retail Facilities

An Expert's View about Retail Sales in Japan

Last updated: 30 Jun 2011

This report introduces the boom of new and existing major department stores and large scale retailing facilities projects in Japan's second largest city, Osaka. The retailers are concentrated in a vibrant, commercially developing area of the city, where consumer confidence and the buying power of the region is increasing. These projects may offer sales opportunities for unique U.S. consumer products.

(JR Osaka Station Lucua, Mitsukoshi/Isetan, Daimaru, Hankyu, and Hanshin)
On May 4, 2011, Japan Railway’s (JR) Osaka station, located in the heart of Umeda, Osaka’s largest shopping and business district, was reborn as Osaka Station City. At the station, the pre-existing south side building was remodeled and expanded to become the South Gate Building accommodating the Daimaru department store and Hotel Granvia. Daimaru expanded to 64,000 square meters, an increase of 60%. The train station too was totally remodeled, where a new concourse was added over the 6 train platforms and a huge sloping and transparent roof was built. The train station now also connects to a whole new 28-story superstructure, the North Gate Building.

The North Gate Building can accommodate retail space, offices and leisure facilities in its 210,000 square meters of floor space. The resident anchor for this new space is the combined 50,000 square meter home of the Mitsukoshi/Isetan department store. The two giant Japanese department store companies, Mitsukoshi and Isetan merged in 2008 and this new store in Osaka Station City is the first featuring both names together. JR West also operates the fashion megastore Lucua with 200 brand name shops in 20,000 square meters of store space in the North Gate Building. In total, the department stores’ retail space, offices and other facilities, such as restaurants, a cinema complex, and a sports gym, Osaka Station City is now the largest single commercial facility in Western Japan (and the second largest nationally).

Meanwhile, the expansion and rebuilding of the Hankyu Umeda Building, just across the street from Osaka Station City, is well underway. Hankyu, the most prominent private railway company in the region, incorporated with another major railway company, Hanshin Electric Railway in 2007 to become (in terms of assets) Japan’s second largest private railway company. Both companies operate department stores and their Osaka stores are connected to their respective train stations at Umeda. The combined company is now managed by the H2O Retailing Corporation and ranks sixth in department store sales for all of Japan. The Hanshin Umeda store was renovated and expanded to 53,000 square meters in 2009 and the Hankyu Umeda store began its current renovation/expansion in 2005. Upon completion in Fall 2012, the new 41-story building with 84,000 square meters of retail space will become Japan’s largest department store in terms of floor space.

With Osaka Station City and the Hankyu and Hanshin department stores, Umeda is now comparable to Tokyo’s Ginza shopping district in terms of department store/retail density. In combination with the completion of other projects in the Umeda area, it is expected that by 2015 Umeda will be serving more than 3 million shoppers per day.

(Daimaru and Takashimaya)
On the Midosuji Boulevard running north-south through Umeda and Namba, Daimaru department store’s stately flagship store, built in 1933, distinctively resides in the district of Shinsaibashi. To increase its presence in the neighborhood and to counter its competitors’ buildup in Umeda, Daimaru purchased the building next door, the closed Sogo department store’s main store. Daimaru already owns several shops in the area and with the former Sogo store expanded its store space in 2009 from 37,490 square meters to 77,000 square meters in total. Daimaru also merged with Matsuzakaya department stores in 2010 to form Japan’s second largest department store group.

Just one kilometer south of Shinsaibashi (a 10 minute walk) is Namba, Osaka’s second largest transportation terminal. At Namba, Nankai Railway, Kintetsu Railway, JR and the subway service approximately 900,000 people per day. The adjacent shopping and entertainment district has grown accordingly. Just like Tokyo’s Akihabara, the world famous shopping area for Japanese electronics, computers and pop culture, Namba has Nipponbashi, its own “electric town.”

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Posted: 30 June 2011, last updated 30 June 2011

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