Medium-term Business Plan

Last updated on March 16, 2017

Basic Policies of the FY2014-2016 Medium-term Business Plan

J. Front Retailing Group (the “Group”) has prepared its FY2014–2016 Medium-term Business Plan.

The Group intends to complete construction of the Ginza 6-chome district 10 redevelopment project in January 2017, and plans to open the south wing of Matsuzakaya Ueno store now under reconstruction in fall 2017.
In line with these plans, over fiscal 2014–2016, setting our sights on growth for fiscal 2017 and beyond, we will not only continue to push ahead with efforts to establish a new department store business model, but also strengthen our initiatives as a multi-retailer that also consists of Parco, StylingLife Holdings and Forest, thus meeting diverse customer needs and dramatically strengthening the competitiveness and profitability of the Group. In this way, we will enhance corporate value and earn the funds for our growth in 2017 and after.
By using the management resources of the Group, we will also push ahead with efforts in fields we consider to have medium and long term growth potential for the Group. Specifically, we will construct a foundation for a business model for growth along with the regions in which we operate with our stores at the core of such growth (urban dominant strategy) and promote omni-channel retailing.
In addition, we will work to expand the breadth of our businesses as a multi-retailer by actively pursuing mergers and acquisitions and joint ventures with external companies.
In order to put these strategies into practice, we will promote management that puts emphasis on human resources and values diversity, and foster a corporate culture that values creation and challenges. While we expand the Group and promote diversity in our workforce, we will also work to ensure thoroughgoing compliance and CSR operations.

Financial Targets

(FY 2016)

Consolidated operating profit ¥45 billion
Consolidated operating margin 4.0%
ROE 6.5%
ROA 4.4%
Operating cash flows ¥130 billion
or more
(total for FY2014-2016)

Capital investment and Growth Investment

(total for FY2014-2016)

Department Store Business ¥49.5 billion
Parco Business ¥37 billion
Other Businesses ¥3.5 billion
M&A ¥20 billion
[ Total ] ¥110 billion 

Financial Target Graph

Positioning of the FY2014-2016 Medium-term Business Plan

Phase for constructing business model foundations
Phase of dramatic growth
Drastically enhance competitiveness and profitability as a multi-retailer
  • Firmly establish the new department store business model, and otherwise transform the business model with respect to existing businesses
  • Further improve management efficiency (organizational and workforce structure reform, cost optimization)
  • Enhance competitiveness by upgrading core technologies
Construct a business model for growth along with regions
(urban dominant strategy)
  • Develop real estates in the vicinity of store locations
  • Strengthen networks with local communities
  • Pursue more extensive Group business opportunities
  • Engage in Group-wide efforts to enhance the appeal of urban areas with our stores at the core, and achieve growth in line with the development of local communities
  • Enhance the Tokyo metropolitan area business through the Ginza 6-chome district 10 redevelopment project and Ueno store south wing rebuilding project
Promote omni-channel retailing that leverages the strengths of real stores
  • Expand business partner networks, product range and target areas with respect to Click & Collect and Endless Aisle services
  • Build up order fulfillment capabilities
  • Provide the same products, services and information as those available through physical stores, while creating an environment to enable access to and from customers anytime, anywhere 

Image of Medium-term Growth

Drastically enhance competitiveness and profitability as a multi-retailer

Department Store Business

  • ・Significantly higher profits at four priority stores (Daimaru Tokyo, Kobe and Sapporo and Matsuzakaya Nagoya)
  • ・Expansion of the upscale market centered on sales to gaisho (out-of-store sales) customers
  • ・Rebuilding of original merchandising and development of new businesses
  • ・Reinforcing of capabilities to serve tourists from overseas

Parco Business

  • ・Opening of the new building of Fukuoka Parco (fall 2014) and floor space expansion of the main building (spring 2015)
  • ・Development of Sendai New Wing (tentative name)(spring 2016)
  • ・Swift development of Zero Gate business including Nagoya (fall 2014) and Sapporo (spring 2016) projects
  • ・Annual renovation of roughly 15% of overall floor space tailored to shifting and diversifying consumer needs

Other Businesses

  • ・Credit Business ¥2.7 billion (¥0.8 billion higher than FY2013)
  • ・Design and Construction Business ¥1.6 billion
  • ・Staffing Service and Commissioned Sales Operations Business ¥0.8 billion, etc.
Daimaru Tokyo
Daimaru Tokyo
Matsuzakaya Nagoya
Matsuzakaya Nagoya
Fukuoka Parco new building
Fukuoka Parco new building
Nagoya Zero Gate

Nagoya Zero Gate

Forge a business model for growth along with regions(urban dominant strategy)

Ginza 6-chome District 10 redevelopment(scheduled to open in April 2017)

Ginza 6-chome district 10 redevelopment project

We are committed to creating an unparalleled commercial facility with the right concept for Ginza which has long attracted a diverse range of visitors from throughout Japan and the entire world and we will work with other commercial floor owners to operate all commercial floors in an integrated manner.

Rebuilding of the south wing of Matsuzakaya Ueno store(scheduled to open in fall 2017)

Project to rebuild the South Wing of the Matsuzakaya Ueno store

The south wing will be rebuilt as a high-rise complex featuring a Parco store, a cinema complex and sophisticated office facilities such that are not currently available in the Okachimachi district, Ueno. This project will breathe new life into the Okachimachi district, which is undergoing many redevelopments, and contribute to the vitality of the area.

Shinsaibashi district redevelopment

Shinsaibashi district redevelopment

To make us significantly more competitive in the Osaka area where an over-abundance of large commercial facilities increases competition, we will move forward with the Shinsaibashi district redevelopment project which is centered on Daimaru Shinsaibashi store (the main building and north and south wings), and also involves the use of real estates and commercial facilities in the district.

Promote omni-channel retailing
With the aim of establishing predominance over the competition in the mid- to long-term, we will raise the level of customer support of the Group centered on retail stores in key urban areas, offer products, services and information similarly online and in physical stores, thus realizing fine-tuned response to our customers by providing seamless access to and from them anytime, anywhere.

Dramatic growth in 2017 and after