Going all-in on suburban malls: diversifying into the developer business (1995)

Designing the next place to earn while the founding business still thrives

The core of this decision was to add, as a group pillar, the business of developing and leasing commercial facilities themselves — rather than leaning on endless growth in the single general-merchandise format. Jusco judged that the shift of shoppers to the suburbs, as the car society advanced, could not be caught by opening more general-merchandise stores alone. So it moved its main effort to suburban shopping centres gathering specialty tenants, and chose to grow their number lightly, by lease, without owning the land. It was a deliberate widening of scope — from a retailer selling goods on a sales floor to a developer that readies a place and gathers people and shops into it.

The general-merchandise store still had room to grow, and guarding the founding business was an option. That Jusco widened into leasing space anyway owed to a reading that single-format growth would eventually hit a ceiling. The reading later came true: after the Large-Scale Retail Stores Law was abolished, the general-merchandise store — heavily located in the regions — struggled in price competition, and Aeon was long tied up rebuilding its founding business. Meanwhile the developer business built around Aeon Mall, listed in 2002, produced steady profit from rents and absorbed that malaise. Designing the next place to earn while the founding business still thrived leaves today’s Aeon the meaning of reshuffling its business mix ahead of change.