Yodobashi vs. Seibu” issue… “Tokyu” and “Bic Camera” join forces to attract more customers “2 to 3 times as many as in the same period last year

Background of First Strike in 61 Years at Major Department Stores

Department stores have long been associated with face-to-face sales of luxury goods such as brand-name clothing. Recently, as consumer needs diversify, the sales floors have changed, and it is not unusual to find electronics retailers and fast-fashion stores such as Uniqlo in the department stores.

This summer, the first strike by a major department store in 61 years made headlines in the department store industry. Sogo & Seibu’s labor union went on strike on August 31 this year, and the Seibu Ikebukuro main store was closed for the entire day. The union’s decision to go on strike was motivated by concerns about continued employment.

On September 1, the day after the strike, parent company Seven & i Holdings transferred its shares in Sogo & Seibu to U.S. investment firm Fortress Investment Group. Under the new parent company, the Seibu Ikebukuro main store has been the subject of a series of reports that Yodobashi Holdings, an electronics retailer, may become the core tenant.

The department store industry has been in the doldrums for a long time. After peaking at 9.7 trillion yen in 1991, the industry’s total sales have been hovering around 5 trillion yen in recent years, including a near halving in 2008, the year of the COVID-19 crisis. The decline in clothing, the mainstay of department stores, has been particularly significant.

Although there are some floors that are busy, such as the department store’s basement food area and the Hokkaido product exhibition, the department stores’ response to the diversification of consumer needs has been sidetracked, except for a few of these floors. Customers for clothing have been flowing to fast fashion stores that offer the latest fashions at low prices and to online retailers, while customers for home electronics have been lost to mass merchandisers and furniture to Nitori and other retailers.

In order to survive, the department store industry has recently begun to take bold measures, which are known as “business restructuring. Many department stores are now focusing on the real estate leasing business, where they rent out their sales floors, rather than selling goods as they have done in the past. Attracting large specialty stores such as electronics retailers is one example.

Electronics retailers are damaging the image of department stores!

Even the Nihonbashi Mitsukoshi main store, a long-established department store, has Bic Camera on the 6th and 7th floors of its new building.

Tokyu Department Store Sapporo has been undergoing a phased renewal since around spring this year, and by the end of September, new stores will almost be in place, with Bic Camera on the 5th and 6th floors, UNIQLO and GU on the 7th floor, and Bandai Namco Entertainment’s amusement park on the 9th floor.

The phased renewal of the Tokyu Department Store Sapporo store is already having a positive effect.

The number of customers is sometimes two or three times that of the same period last year,” said a spokesperson for the Sapporo store.

Tokyu Department Store is promoting a multi-business model called “Fusion Retailer. The Sapporo store will be a part of this model, with several large specialty stores with high customer appeal, especially on the 5th through 9th floors. Some parts of the store are leased real estate, while other parts are operated as a conventional department store, and the two are said to be mixed.

A spokesperson for Tokyu Department Store said,

We will focus more on areas where we have strengths, such as food and cosmetics, and allocate personnel to new businesses,” said a spokesperson.

The allocation of personnel will be flexible. The company plans to be flexible in the allocation of personnel.

In the department store industry, it has become a common practice to lease floor space to large specialty stores and to flexibly reassign department store employees, without being bound by conventional management styles.

Is the opposition of Sogo & Seibu’s labor union, as in the strike described at the beginning of this article, due to concerns that under the new parent company, the core tenant of the Seibu Ikebukuro main store will be an electronics retail store?

We are not opposed to Yodobashi Camera because we don’t like the idea of it coming in. We are well aware that the department store industry and the company’s business situation are difficult,” said Mr. Kato, who is also the president of Sogo & Seibu.

said a representative of Sogo & Seibu’s labor union.

Seven & i HD, the former parent company of Sogo & Seibu, has said that it is fine with the employment of department store workers and that it will protect their jobs. However, Sogo & Seibu’s labor union members are skeptical, wondering if there is information they have not been informed of, such as the drastic change in store operations, and whether their jobs will really be protected.

According to a Sogo & Seibu labor union representative, after Seven & i HD announced the stock transfer last November, there was no information about the stock transfer and no decision-making authority when asked by the Seibu department stores. The labor union had requested Seven & i HD to discuss the matter. However, in August of this year, Seven & i HD suddenly announced that it would complete the stock transfer.

This labor union official said, “We can assume that an electronics retailer coming in is an option. The problem is that we cannot fully confirm that employment will be maintained,” he said. It remains to be seen whether Seibu Department Store will be able to gain the understanding of its employees and use the same methods as its competitors, such as a drastic change in business format, to increase its ability to attract customers.