p to the task. On August 15, the company reported sales for July at its 14 domestic department stores, which were up 11.1% year on year, the tenth monthly gain on the trot. Best performer was the Shinjuku unit in Tokyo, which saw sales rise by 33.4%, the tenth consecutive double-digit percentage gain. The Shinjuku store accounts for just over nine percent of company department store sales, making it number five in revenue behind the flagship in Nihombashi, and the stores in Yokohama, Osaka and Kyoto/Rakusei. Collectively, these five stores alone garner more than 75% of sales, with the remainder divided up among the other nine units. Footfall was up 6.4% year over year, and indeed the increase in customer traffic and the significant sales growth are partly due to the return of overseas tourists, upon which some of Takashimaya’s department stores are heavily reliant for duty-free sales. The Shinjuku and Osaka branches get about 20% of sales in this way. Duty-free sales overall rose by 153.2% in July. Still, sales to tourists across the chain are being held back by current government border policy: visitors on government-vetted package tours are now allowed but individual tourists are not. So tourism, though higher than last year when it was next to zero, are still well down on pre-pandemic levels. It is rumoured that non-package tourists will be welcomed back soon, possibly in the next month or so. What is selling?  Best-performing categories are apparel, personal accessories such as jewelry and watches, home appliances, cosmetics, other accessories and the stores’ restaurants and cafes, which are enjoying boom times now that people are getting out again. Conversely, sales growth of food for home consumption is flattening out. The online business is a particular target of the company for growth and Takashimaya hopes to reach 50 billion JPY (US$370 million) this year but it is a tough ask, despite the fact that the company has been investing in improving its smartphone-friendliness and fine-tuning both its online product showcasing and product mix. Looking Abroad Overall, the four stores overseas — in Singapore, Ho Chi Minh City, Shanghai and Bangkok — generated 19.5 billion JPY (approximately US$143 million) in operating revenue in the last financial year and contributed 1.3 billion JPY (US$9.4 million) in operating profit, numbers that should perk up significantly by the end of this year as sales growth continues its recovery and the cycling of soft prior year comparisons is completed. In mid-2019 the company announced it was closing the Shanghai store and pulling out of China, but later changed its mind after negotiating a rent reduction with its landlord. But the store seems to have been ill-starred. In the second quarter of this year, Shanghai was locked down for 65 days up through June 1 and the Takashimaya store itself didn’t open for nearly a week after that, even then on shorter opening hours. Prior to the shutdown, when converted to the weaker yen, revenue and profits have not slumped so badly at the store as they otherwise would have. Takashimaya is confident that the Shanghai unit can be profitable over the longer term but the Chinese government’s ongoing commitment to zero-Covid lends a cloud of unpredictability that does not hang so heavily over its operations elsewhere in the region, with the possible exception of Vietnam.  Meanwhile, in the Singapore store on Orchard Road, revenue and profit have been on the bounce. Depreciation of the yen has also made the results look chubbier. A year ago the Singapore dollar was buying 80 Yen, now it is buying almost 100, a Yen depreciation of 25%. However, with about a fifth of all the store’s sales coming from tourists, particularly wealthy visitors from other countries in Asia. They are coming back, but only slowly, so offsetting increases in domestic spending is playing a more important role.  Takashimaya’s Vietnam store is in the Saigon Centre in Ho Chi Minh City. In Vietnam, with tourists trickling back and the economy — at least so far — rebounding, store revenues and profits are up strongly and are now probably running at close to pre-pandemic levels at the time of preparing this story. However, the bar is set very low, since Vietnam was locked down for more than four months in 2021 and Takashimaya would be expecting a monstrous improvement against that benchmark. Likewise in Thailand where tourists are again making a big difference at the 35,000 square-metre flagship store at ICONSIAM. Tourist arrivals in Thailand hit two million in the first half of the year, still nowhere near pre-pandemic levels but clearly heading up toward the government’s target of 10 million for the year, after all restrictions on international arrivals ceased as of July 1. Note, however, that the composition of the arrivals changed, with tourists from India at the top. The low level of tourism from China and Japan hurts, since Takashimaya is focused more heavily on high-spending customers for its luxury goods: the composition of tourism makes a significant difference. The Bangkok store is also something of an anomaly in not being located in the downtown, but well to the west and across the Chao Phraya River.  The View Forward Looking forward, Takashimaya will continue to benefit from the loyalty of its affluent customer loyalty base. It is still something of a gamble to depend on the company’s brand cache in Japan extending overseas, although the Singapore store has been a fixture now for decades and the Vietnam store looks very promising. There are question marks around the Shanghai and Bangkok units. One advantage that Takashimaya has is the synergy between the department store business and the company’s commercial property arm (Toshin), which can develop a retail, office and residential infrastructure with its associated customer base around the department store anchor. Takashimaya is part of important shopping centre and larger commercial developments in a number of locations. Examples are The Saigon Centre in Saigon, Takashimaya in Singapore, ICONSIAM in Bangkok and the Nihombashi store in Tokyo. As always with the department store format, there needs to be laser focus on customer acquisition in younger age groups. The older cohort may be wealthy, but they are not looking so much to buy material goods for themselves so much. How well Takashimaya solves that problem will go a long way to determining its future.