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Tokyu Store Chain has been a massive disappointment. Much hope was pinned on the opening of more warehouses sorting out their distribution, reducing working capital and pushing up margins. This has not materialised. In this situation there is better value in other retailers.
Tokyu Store Chain is one of the few Japanese retail companies who are addressing their supply chain and working capital. The big kicker will come in the second half 06, as that is when their centralised distribution warehousing kicks-off. This is the key to them improving their working capital. We expect to see inventory and payable days reduced and wastage cut. They are also cutting staff count, which will contain wage costs despite store expansion and rising general wage pressures. Even so, they managed to post expanding operating margins in their recently announced first quarter results. We find it difficult to see the stock getting much cheaper at 0.17x p/sales for the year to March 2008.
| Sedol |
Type |
Price |
Date |
| 6896151 |
6896151 |
JPY 443.685 |
22/10/2007 |
| 6896151 |
Buy |
JPY 700.80 |
05/02/2007 |
| 6896151 |
Buy |
JPY 822.24 |
03/08/2006 |
| 6896151 |
Buy |
JPY 880.32 |
10/07/2006 |
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