— See Separate Table For Details

TOKYO (MNI) – Combined sales at Japanese department stores in
September are forecast to have fallen from a year earlier, with the pace
of decline accelerating from -1.7% in August, hit by stormy weather
conditions, a Market News International survey showed.

The Japan Department Stores Association will release September data
at 1430 JST (0530 GMT) on Tuesday, Oct. 18.

In August, sales showed a second straight monthly y/y drop,
following -0.1% in July and +0.3% in June.

Only two out of the seven department store chains surveyed reported
year-on-year gains in their September sales while five said their sales
fell. This is a deterioration from increases at three groups, decreases
at three and no change at one in August.

Spokesmen at the surveyed chains said September sales were sluggish
because two major typhoons wreaked havoc in many parts of Japan and
relatively high temperatures in the first half of the month hit sales of
autumn clothing.

But excluding weather factors, consumers’ purchasing power remained
firm, spokesmen at some store chains said.

A spokesman at Takashimaya said sales of jewelry and other luxury
items showed a strong 4.8% gain on the year in September, compared with
a 1.8% fall in the group’s overall sales.

Sales of luxury items accounted for about 4% of combined department
store sales in Japan last year.

Meanwhile, in the first half of October, department store sales
showed signs of recovery as lower temperatures spurred demand for autumn
and winter clothing.

Apparel sales accounted for around 35% of combined department store
sales last year.

Four out of six department stores reported year-on-year gains in
sales between Oct. 1 and Oct. 13 while one said sales fell and the other
one said there was no change.

Also good news for department store operators is that the slump in
purchases by overseas customers triggered by the Fukushima nuclear
disaster has been easing gradually.

A spokesman for Matsuya said sales to overseas customers fell only
about 35% on year between Oct. 1 and Oct. 10, improving from -44% in
September and -70% in August.

But the outlook may not be so rosy.

“There are some concerns” about near-term sales prospects as the
drag from the strong yen and slowing global economic growth may dampen
domestic demand, said a spokesman at J. Front Retailing, which owns
Daimaru and Matsuzakaya.

The Economy Watchers’ Survey index for the current economic
conditions, which is widely seen as a leading indicator of the economy,
marked a second straight month of deterioration in September as the
yen’s rise dampened sentiment, according to the Cabinet Office.

skodama@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4838 **

[TOPICS: M$J$$$,M$A$$$,MAJDS$]