Japan's biggest department store appoints new CEO amid weak sales

Isetan Mitsukoshi Holdings Ltd appointed a new chief executive on Tuesday as Japan's biggest department store chain by revenue battles to reverse a sharp fall in shopping by foreign tourists.

In a filing with the Tokyo Stock Exchange, Isetan Mitsukoshi said Toshihiko Sugie, senior managing executive officer, would become CEO on April 1, replacing Hiroshi Ohnishi who had been in the role since 2012.

Isetan Mitsukoshi said it made the change "to further improve corporate value by installing fresh management."

Company officials were not available for further comment.

Japanese department store sales fell to less than 6 trillion yen ($52.70 billion) last year from a 1991 peak of 9.7 trillion yen, as the upscale retailers suffer from weak economic growth, changing consumer tastes and e-commerce competition.

The industry enjoyed a brief boom in recent years due so-called explosive buying of pricey items such as jewellery and watches by foreign tourists, especially Chinese.

The boom has ended though the number of foreign tourists is rising, by 21.8 percent to a record 24 million in 2016, Japan National Tourism Organization data showed. Over 70 percent of tourists came from China, South Korea, Taiwan and Hong Kong.

Isetan Mitsukoshi said its duty-free sales, widely regarded as proxy for spending by foreign visitors, fell 19 percent to 36.7 billion yen over the nine months through December.

In an interview with Reuters last year, Ohnishi said Chinese shoppers have not been spending as much as they did over the past two or three years.

Shopping is also becoming less central to Chinese tourists' visits with the focus shifting toward sightseeing, he said.

($1 = 113.8500 yen)