Japan: Cainz Open a New Type of Membership-Only Pro-Store

This August Cainz will open its first pro-concept store, “C’z PRO”, in Yokohama, Japan. This will be its entry into the membership-based wholesale business for construction professionals. Since July the company has started recruiting members on their C’z PRO website.

The C’z PRO store will offer wide range of building materials and tools as well as a variety of services. The store will have a “Creative Space” for members only, providing rental tools, copy services, a library of catalogues and building material samples. Members will also be able to use this space as a meeting spot for information-sharing with each other, including free drinks.

Cainz have also developed a unique ordering service for their “C’z GO!” stores. An online application enables members to search and purchase all products offered in the store in real time. There are also three options for picking up the items: pick up at the store during business hours, pick up from a pick-up locker outside the store at any time, or have the goods delivered directly to the site.

 

Japan: DCM HLDGS Demonstrate Significantly Increased Sales and Profits in Q1.

DCM HLDGS posted an 8.8% YoY increase in sales to JPY124 billion in March-May, partly due to the favourable impact on sales due to Covid-19, as seen in many countries throughout the world. DIY Retailing has been classified as essential retailing in Japan.

The number of DCM-branded items increased by 3,400 SKUs from the same period last year, now making up some 23,300 SKUs, and the improved mark-up rate has pushed the gross profit margin upward 0.9 points YoY to 33.9%.

On the other hand, the SG&A expense has been cut down by 2.6 points YoY to 26.0%, partly due to a reduction in newspaper flyers as the company refrained from aggressive sales promotion during the height of the pandemic. As a result, operating profit was up YoY by 70.4% to JPY11.6 billion.

The sales of gardening, DIY projects and infection-prevention-related products have significantly increased due to the stay-home and remote work trends seen in Japan.

 

Japan: Arckland Sakamoto Acquires LIXIL Viva

Arckland Sakamoto, a regional DIY chain in Japan, recently announced that it will make LIXIL Viva a wholly owned subsidiary of its company.

The integration, based on a spirit of equality, will result in a transition to a holding structure by the end of fiscal 2021. The holding company targets sales of JPY 500 billion and operating income of JPY 40 billion (operating margin: 8%) in 10 years.

In FY2020, LIXIL Viva posted sales of JPY 196.9 billion and Arckland posted sales of JPY 112.7 billion, therefore posting combined sales of JPY 309.6 billion, beating out Nafco, the fifth largest company in the Japanese DIY sector.

Following the integration there will be a total 138 stores – 38 Arckland stores and 100 LIXIL Viva stores. The two companies have little area overlap and are complementary, with the aim to become a leading company in the industry as a national market, rather than a regional chain.

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Japan: Cainz Opens First “Style Factory” Shop in Tokyo Area

Cainz will open two Style Factory shops in the Tokyo metropolitan area this summer.

These metro concept stores will offer a
place in which customers can find tips to express their own styles in daily life, hence their characterisation as “Lifestyle DIY Shops”. A wide range of selected products will be available, through a variety of services such as household products that make housework fun, DIY supplies to add a twist in the home and design-conscious interior products that create space to spend time with pets.

The floor layout of these stores will not be based on functional categories as in usual stores, but on solution categories such as “& Pet”, “SMALL SPACE”, “Good Sleep”, “Easy Yoga” and “CREATIVE-DIY” etc. Currently, the company operates one Style Factory shop in Nagoya.

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Japan: LIXIL Viva reports revenue rise

LIXIL Viva has reported higher sales and lower profits for FY2019 (ended 31 March 2020) with sales of JPY 18.5 bn (+4.2% YoY), operating profit of JPY 10.0 bn (-7.5%), recurring profit of JPY 9.3 bn (-7.1%) and net income of JPY 6.5 bn (-64.2%). It was the second year of the company’s three-year mid-term management plan and the company positioned FY2019 as an upfront investment phase in stores, digitalization and logistics. As a result, sales were 2.3 points below the plan due to voluntary sales-promotion cancellations in February and March 2020 due to the impact of the COVID-19 infection, but operating profit was 7.6 points above the plan due to an improvement in the gross margin. Comparable store sales were down 1.4%. The company is continuing with its plans to open seven new stores in FY2020.

Source: Diamond Home Center Magazine

Japan: Joyful Honda sales and income increased in H1

In Q2 of FY2020 (ended 31 December 2019), Joyful Honda posted sales of JPY 76.0 bn (+1.6% YoY), operating profit of JPY 5.6 bn (+34.1% YoY) and recurring profit of JPY 6.2 bn (+27.6% YoY), resulting in higher sales and profits. Comparable store sales grew 2.7% YoY, driven by rushed demand prior to the consumption tax hike and demand for power outages and restoration following a typhoon. The large increase in profit was due to higher comparable store sales, an improved gross margin and a lower SG&A ratio. The gross profit margin improved by 0.8 percentage points to 28.2%. This was due to a 6.4% YoY increase in sales in the home improvement category such as building materials and DIY, and remodeling, which has a high gross margin and is the company’s most focused category. The SG&A ratio decreased 1.1% YoY due to a decrease in depreciation and amortization, a reduction in electricity consumption, a reduction in flyer costs through a review of sales promotion measures and a reduction in store labor costs through a reduction in total working hours. Under new president Mr. Hosoya, the company has set three key KPIs: improving the gross margin, increasing the number of items purchased and the ability to sell out flexibly.

Source: Diamond Home Center Magazine

Japan: DCM HLDGS board changes and operations integration

In March 2020, DCM HLDGS announced the promotion of its vice president, Mr. Yasunori Ishiguro, to the position of president, and former president, Mr. Toshihiro Hisada, to the position of chairman with representative rights. In addition, they intend to integrate their five operating companies, DCM Karma, DCM Daiki, DCM Homac, DCM Sanwa and DCM Kuroganeya by March 2021.The holding company was established in September 2006 through a joint stock transfer between Karma, Daiki, and Homac, and later acquired Sanwa and Kuroganeya. The company now operates 673 stores across the nation as the largest player in Japan. Since then, the company has worked to unify its organization, internal systems, information systems and operations as well as to develop private label, improve logistics and integrate the operations of group companies. The decision to integrate was made in order to respond more quickly and effectively than ever before to the demands and social and economic changes that may occur in the future. DCM HLDGS predicts an operating revenue of 449.5 billion yen (+0.8% YoY) and operating profit of 23.0 billion yen (+9.5% YoY) for the 2019 financial year.

 

Source: Diamond Home Center Magazine