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November 23, 2007 |
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MITSUKOSHI LTD: Shareholders Approve Isetan Merger Plan Shareholders of Mitsukoshi Ltd. and Isetan Co. approved the planned merger of the two department store chains, paving the way for the creation of Japan's no. 1 department store group, Kyodo News reports. Both companies, which announced the integration of operations in August, have a combined consolidated sales of JPY1.58 trillion for the 2006 business year, notes Kyodo News. The report states that Mitsukoshi and Isetan will merge operations on April 1, 2008, under a holding company in hopes of drawing on each other's strengths to prevail in the intensifying competition in the industry by integrating information systems, operation flows and procurements of goods under the merger. Mitsukoshi has strength in the more upscale customer base, while Isetan is popular with trend-conscious young consumers, the report relates. Should the merger push through, Mitsukoshi, Japan's 4th biggest department store chain, and Isetan, the fifth-largest, would overtake J.Front Retailing Co., which will be created in September by Matsuzakaya Holdings Co. and Daimaru Inc., whose combined sales reached JPY1.17 trillion for the latest reporting year, Kyodo adds. Kyodo News conveys that when they announced the merger in August, Isetan President Nobukazu Muto said Isetan Mitsukoshi Holdings' first goal is to achieve an operating profit margin of 5% by March 2013 and post an operating profit of JPY100 billion by March 2018. Mr. Muto told his company's shareholders that the merger was decided on after taking into account whether corporate value would be higher after 10 years than by going it alone, relates Kyodo News. The head office of Isetan Mitsukoshi Holdings, adds Kyodo News, will be located in Tokyo's Ginza district and the Mitsukoshi and Isetan stores will retain their names. Mr. Muto will assume the chief executive officer and chairman of the holding company, while Mitsukoshi's Ishizuka will take the president and chief operating officer post. About Mitsukoshi Ltd. Mitsukoshi Ltd. was established through the merger of Mitsukoshi Ltd., Nagoya Mitsukoshi, Chiba Mitsukoshi, Kagoshima Mitsukoshi, and Fukuoka Mitsukoshi. The company operates department stores throughout Japan, selling clothing, food, household goods, cosmetics, and general merchandise. * * * Mitsukoshi Ltd. carries Standard & Poor's BB- Long-Term Foreign and Local Issuer Credit Ratings. Mikuni Credit Ratings gave the company a 'B' rating on its mortgage debt, and a 'B' rating on its senior debt. |
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