Jiji PressTOKYO (Jiji Press) — Isetan Mitsukoshi Holdings Ltd. will promote internal discussions so that it can speed up structural reforms, Toshihiko Sugie, the company’s next president, said Monday.
Isetan Mitsukoshi will strengthen its real estate operations to make it a new profit center other than its mainstay department store operations, said Senior Managing Executive Officer Sugie, 56, set to take the company’s helm on April 1.
Sugie worked with outgoing President Hiroshi Onishi to set the group’s latest business plan.
“The plan was not wrong,” Sugie said. “But we could not gain enough understanding because we lacked dialogue with workers in the field when implementing the plan.”
Onishi put more priority on growth businesses than structural reforms, while Sugie thought it more important to carry out reforms, according to the next president. “I’ll change the way,” Sugie stressed.
Sugie said he will take a selection-and-concentration approach to operations other than the department store division.
“We have a lot of prime real estate plots that have been underutilized,” he said, expressing hopes of strengthening the group’s real estate operations.
The department store operations “have remained unable to deal with changes of the times,” Sugie said, showing his intention to beef up beauty salon, food and other services as well as online shopping.
Sugie warned that regional department stores cannot survive with their current business model. He noted the importance of structural reforms without ruling out shutdowns.
Sugie said moves toward the group’s sudden leadership change began in November last year when it moved back its target of generating ¥50 billion in operating profit in fiscal 2018 due to sluggish closing sales and lower demand from foreign visitors.
Onishi then mentioned drastic reforms of four outlets, including one in Hiroshima, throwing the group into turmoil and sparking criticism from the labor side, according to Sugie.