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Mitsukoshi to close six stores

TOKYO - Bloomberg | 9/26/2008 12:00:00 AM |

Isetan Mitsukoshi Holdings, Japan's largest department-store operator, will close six Mitsukoshi outlets by next year to improve the performance of the chain it acquired in April.The

Isetan Mitsukoshi Holdings, Japan's largest department-store operator, will close six Mitsukoshi outlets by next year to improve the performance of the chain it acquired in April.

The closures include the Mitsukoshi store in the Tokyo district of Ikebukuro, which will be sold for 75 billion yen ($709 million), the company said in a statement to Tokyo's stock exchange. Earnings for the year ending March 2009 won't be affected and the impact on the subsequent fiscal year is being calculated, it added.

The move comes six months after Isetan completed the purchase of Mitsukoshi, which has suffered years of declining revenue. Japan's department-store sales have slumped for the past six straight months as stagnant wages and an aging population sap consumer demand.

“Store closures aren't a surprise given Mitsukoshi's performance and the severe business environment,” Koichiro Ogawa, a Tokyo-based analyst at CSK Group, said. “The focus for all department-store retailers is to keep costs under control.”

Small-scale Mitsukoshi stores in London, Paris, Rome and Madrid may also close as leases expire, the Nikkei newspaper reported.

In July, the retailer announced the closure of three Mitsukoshi outlets in Germany.

Sales at Mitsukoshi, founded as a kimono store in 1673, declined 3.8 percent to 774 billion yen in the 12 months ended February.

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