Department stores forge to cut costs

Business Asia, March 17, 2000

Recession-hit Japanese department store operators Takashimaya and Mitsukoshi have unveiled a wide-ranging tie-up aimed at cuffing costs to survive intensified competition.

Although they will continue to operate their department stores separately, the companies will integrate delivery, jointly purchase products and jointly develop customer information and e-commerce systems.

The move is aimed at boosting efficiency -- and hopefully profits -- in the face of stubbornly sluggish sales, as Japanese consumer spending continues to drop because of high unemployment, falling wages and economic uncertainty.

"We expect this cost-cutting plan to be highly effective," said a Mitsukoshi spokesman. "We are reviewing our costs to put our earnings back on the right track."

Japan's economic problems have hit the nation's glitzy department stores particularly hard.

-- Reuters