Japan: Mitsubishi rayon examining expansion of Chinese acrylic fiber joint venture

Asian Textile Business, Mar 2003

Mitsukoshi, Ltd. has announced its group reorganization plan with the focus on the integration of five department store business firms. This plan aims for the establishment of a "high-quality retail group" by concentrating management resources on the mainstay department store operations with particular emphasis on the merger of five department store firms to create a new company.

This plan intends to create a new company as of September 1 by merging the parent company Mitsukoshi, Ltd. with its subsidiaries, namely, Nagoya Mitsukoshi, Chiba Mitsukoshi, Kagoshima Mitsukoshi and Fukuoka Mitsukoshi. By centralizing diversified backup services such as customer service, accounting and information systems, this plan aims at the structuring of a system with top priority on marketing through the utilization of nationwide store networks.

Prospects for sales of these five firms combined at the end of this accounting term are 895 billion yen and those for operating profits are 15.4 billion yen. The company plans sales of 878 billion yen and operating profits of 21 billion yen for fiscal 2004 based on a trial computation that sales will decline by 1% annually.

The plan includes the implementation of personnel curtailment through natural reductions such as retirement at the compulsory retirement age and also through innovations in the forms of employment. Present employees of nearly 8,000 are going to be reduced to the 6,000-- employee level in fiscal 2006.

At the same time, a review of all business operations will take place on the basis of "one company for one business." At the present phase, the implementation will focus on two business sectors, namely, food and real estate property. In line with the progress in these reorganization programs, the company expects that cost savings will be nearly 7 billion yen.