Izumi Co., Ltd. operates large malls and supermarkets in Japan, including the “You Me” branded supermalls. The company operates 85 malls/stores in Chugoku, Kyushu, and other regions. The company was founded in 1961 and is headquartered in Hiroshima, Japan. As a consumer retail business, the company's growth prospects were adversely affected by the 2011 earthquake, but early signs of recovery are promising.
Izumi generates revenue both from direct sales as well as rent from its tenants in its large supermalls. In 2010, the company reported US$5.2 billion in revenue and US$97.9 million in net income.
Looking forward, the company aims to expand into smaller areas before not thought suitable for the large You Me mall format. The company is launching a more compact supercenter with more limited product selection and tenants, beginning in April 2010.
The Japanese government is considering a few tax measures as means of financing post-quake reconstruction. These measures include (i) a 10% increase in income tax for 3-5 years (yielding an ¥1.3 trillion annually), (ii) a modest increase in consumption tax (a 2-3% increase from FY2012 onward for two-three years only; each 1% increase would raise around ¥2.5 trillion), and (iii) a possible increase in electricity charges related to the nuclear power plant problems and a higher burden for the public. On the other hand, recovery may continue as aggregate retail same-store sales in Japan recovered to 1.4% year-over-year growth in April from a 3.5% decline in March following the earthquake.
Consumers may continue to rein in spending if the Japanese economy remains lackluster for the time being. Consumer spending could remain weak for a longer period in light of deteriorating employment and income coupled with rapid cooling of consumer sentiment. Sales of discretionary goods will likely be sluggish as this trend continues. Some analysts see consumer sentiment as unlikely to recover until 2012, given the nuclear power plant issue and political uncertainty.
Aeon competes in the Japanese consumer goods retail space in Japan, as well as several other countries. Selected competitors include: