Isetan Mitsukoshi Holdings Ltd. said Wednesday it expects a group net loss of 60 billion yen ($570 million) for this fiscal year, as the coronavirus outbreak will dampen department store sales with customers cautious about going shopping and consumer sentiment remaining weak.
The major department store operator expects its net loss to widen in the current year to March 2021 from 11.19 billion yen the previous year.
Isetan Mitsukoshi forecast a group operating loss of 38 billion yen, down from a profit of 15.68 billion yen, and group sales are seen at 823 billion yen, down 26.5 percent.
The outlook also reflects tighter border restriction imposed by the Japanese government to curb the spread of the virus after inbound travelers had helped boost duty-free sales at department stores.
In the first quarter through June 30, the company, which runs Isetan and Mitsukoshi department stores, saw a net loss of 30.58 billion yen, as it temporarily closed its outlets or shortened their business hours after the government declared a state of emergency in April over the virus outbreak.
The department store operator gradually restarted operations from the middle of May but customer visits were down significantly from a year earlier.
"There is a possibility that our forecast (for FY 2020) will change significantly, as we have not assumed or factored in the impact of socially restrictive measures such as another declaration of a state of emergency that could be introduced as a result of the second wave of novel coronavirus infections," it said.
Its rivals such as Takashimaya Co., Sogo and Seibu Co. and J. Front Retailing Co., operator of Daimaru and Matsuzakaya, also reported operating losses for the March-May quarter, citing a drop in sales stemming from suspensions of operations at their stores due to the virus spread.
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