Mitsukoshi to close historic department store in Niigata

Niigata City is losing major retail players due to a declining population and a shift in consumer habits towards online shopping and larger suburban malls. On September 26, Isetan Mitsukoshi Holdings announced the planned closure of their Mitsukoshi Department Store in the city by March 2020. The closure is expected to worsen the decline in the city center’s retail district.

The store opened in the Furumachi district in 1936 as the Kobayashi Department Store. It was possibly the most successful department store in the city up until the 1950s when it was overtaken by the nearby Bandai Department Store. The 1960s and 1970s saw a boom in the retail sector with numerous other competitors opening up nearby, spurred on by the 1971 announcement of the new Joetsu Shinkansen Line which would link Tokyo and Niigata. As a result, a newer and more popular retail district began to form in the Bandai area closer to Niigata Station.

In 1978 the Kobayashi Department Store became part of the Mitsukoshi Group and in 1980 the store was renamed as the Mitsukoshi Department Store. Subsequent alterations and extensions over the years have masked the 1930s exterior.  At its peak, it achieved annual sales of over 25 billion Yen in 1997. By 2018, revenues had dropped by almost half.

LEFT: The former Kobayashi Department Store (Mitsukoshi Department Store); RIGHT: The former Bandai Department Store (Daiwa Department Store). Images via the Niigata Central Shopping District Cooperative.

In 2010, the nearby Daiwa Department Store closed its doors after 73 years of operations. The store opened in 1937 as the Bandai Department Store. A lack of retail knowledge saw the store record a huge loss within the first 6 months of operations, in stark contrast to the Kobayashi store which recorded a 55,000 Yen profit in its first year. Land underneath Daiwa’s department store held the title as the most expensive valued land in the prefecture. It lost its title to land closer to Niigata Station in the 1980s when the Shinkansen train started running. In the early 1990s, foot traffic around the department store decreased dramatically. The Standard Land Price at a survey point across the street from the former store increased in 2018 by 0.7%, the first increase seen since 1991. Land values are down almost 80% from 1998 and down 91% from their peak in 1991.

There were high hopes that the opening of the 125m tall NEXT21 building in 1993 – the first skyscraper on the Sea of Japan side of the country – would lead to a revival of Furumachi’s retail district but these expectations did not come to fruition with shoppers preferring the free parking at the many large suburban shopping centers that were opening up. LaForet Harajuku, the anchor store in NEXT21, closed their doors in 2016, leaving Mitsukoshi and Itoya Kado as the only two remaining large department stores in Furumachi.

The Daiwa Department Store building was demolished in 2017 and is currently being redeveloped into a 12-storey office and retail building due for completion in March 2020.

Location

Nishiboridori 5 Bancho, Chuo-ku, Niigata City, Niigata Prefecture

Sources:
The Nikkei Shimbun, September 27, 2018.
The Sankei Shimbun, September 26, 2018.
The Mainichi Shimbun, September 27, 2018.