TOKYO – Mitsukoshi and Isetan, the fourth and fifth largest department stores in Japan, are merging to create that country’s largest department store chain. The merger will create a company called Mitsukoshi Isetan Holdings to operate 27 stores headed by Isetan president Nobukazu Muto, who will become CEO. Mitsukoshi’s Kunio Ishizuka will be president and COO.
The merger comes as a result of tough economic conditions in Japan. The population is shrinking and aging and department stores have been joining forces to stay afloat. Mitsukoshi has endured six years of falling revenue. The two chains, which focus on different demographics (Mitsukoshi on the wealthy and Isetan on the young), hope that combining will strengthen them.
Mitsukoshi started in the 17-century as a kimono store. It currently operates 20 stores. Isetan started in 1886 and operates seven stores. According to Bloomberg news, the combined companies create a retailer $14 billion in yearly sales, making it one of the top 10 department-store chains in the world.