The Nikkei also attributes this to the fact that the mercury has been falling lower than previous years, giving a much needed boost to sales of coats, scarves, and gloves. Newly renovated stores in both Tokyo and Osaka generated larger foot traffic as well.
Clothing sales have seen growth for the first time in three months, by 3.4%; and in particular, men's clothing and accessories were up 5.8% while women's clothing and accessories were up by 3.0%. But home wares and accessories have fallen 5.1%.
Of course, one must bear in mind that 2011 figures saw a steep fall due to the Great East Japan Earthquake of 11 March 2011.
The department stores are badly in need of good news and thus it is time there was some.
Hankyu Umeda has just spent 60 billion yen to renovate the store, and is aiming to achieve revenues of 213.0 billion yen in the first year. Though the store had "sneak peek" openings in certain sections of its stores, the post-renovation grand opening was on 21 November.
Isetan Shinjuku in Tokyo has just spent 9.0 billion yen to renovate its main area - women's clothing and accessories and is shooting for 235.0 billion yen in fiscal 2011. And so far, it claims the investment has paid off with a 60% boost in revenue YOY.
The Japanese retail market is now estimated to be around 135 trillion yen, and department stores have approximately 5% market share. There are entire generations - mainly the F1 and F2 group (young, urban female adults) - who claim they have never made a purchase in a department store in their lives, so the challenges are huge.
Will Japanese department stores go extinct as the older generation pass away (even though we do have the world's longest living women)? Or, will such renovations enable Japanese department stores to get out of the addiction to markdowns and get them back on track to the aspirational shopping destinations they once were?
Even Isetan Shinjuku has offered "an additional 10% discount for a limited period" to its branded credit card holders leading up to its grand re-opening, which was at the beginning of the AW2012 season.
Among suppliers and brands, Japanese department stores are notorious for being "real estate agents" whereby their staff only man the cash registers and the rest is handled by the brands that put the goods on the floor as well as the sales assistants on a concession basis. This means that technically, the department stores do not "own" most of the goods on the floors until the item is scanned at the cash register as it is purchased.
This practice squeezes the margins out of the brands, with "rent" being as high as 50% off the retail price for some goods, and around 32% on average.
As I have run businesses for both Japanese and overseas brands, I have noted that this is the biggest choke on department store retail for brands. The other expenses, be it utility costs, overhead, or marketing - come in at around the same percentage of revenue as in any other OECD market. But this "rent" really is the killer.
And, as revenue (read, "sell through") has been shrinking for the last 15 years, it has become more and more costly to do business with or through department stores, especially if your target audience are among the F1 and F2 group.
Some brands targeting women aged 19 - 25 years of age claim that being in department stores is a total waste because 2/3 of their revenue comes through mobile commerce and ZOZO Town and the rest comes through fashion buildings or terminal buildings (commercial facilities adjacent to terminal train stations).
Traditionally, the first days of trade in the new year are great indicators for the year ahead, so we will get some clear market messages as consumers vote with their wallets.