Tokyu Hands was one of the first stores I visited when I came to Japan. I vividly recall their store in Tokyo with many more floors (and staircases) than I can remember; and then there’s the eclectic range of premium merchandise. Want something you can’t find elsewhere? Go to Tokyu Hands, said my colleagues.
Founded in 1976, Tokyu Hands has 86 outlets including outlets in Taiwan and Singapore. Tokyu Hands was one of the big benefits of Japan’s pre-pandemic tourist boom that saw nearly 40m visitors annually.
But nothing changes like change.
The pandemic, the cessation of the tourist trade and the ever expanding ecommerce offers caused severe disruption to Tokyu Hands.
In the 2020/21 financial year Tokyu Hands sales dropped by 35% to JPY 63b, US$435m. That’s a big drop and for a retailer whose prime locations are expensive city centres, a catastrophe.
Tokyu Hands was owned by a large conglomerate, the Tokyu group, whose interests range from retailing, ski resorts and advertising.
Enter stage left Cainz. In March 2022 Cainz acquired Tokyu Hands in March for an undisclosed sum.
For readers who have never been to Japan, Cainz may be an unfamiliar name, as is the home centre channel.
Home Centres are large retailers focused on gardening, DIY and to some extent pet products as well as lighting and other home accessories. Home Centres are almost all in the suburbs, their merchandise bulky and their pricing, aggressive.
Cainz is one of the largest Home Centre chains, it is strongest in the Kanto area around Tokyo.
To say that Cainz and Tokyu Hands are polar opposites would be an overstatement, however their merchandise selection, store size, location and pricing are very different.
Now the Tokyu name has to go leaving the business as ‘Hands’. What are Cainz’s plans for Hands?
Possibly Cainz will look to close unprofitable stores and beef up the Hands ecommerce platform as a start. Perhaps there is also leverage in lifestyle and product development. Cainz say there are IT and sourcing synergies.
If I were Cainz management I would look to take the Hands brand and know-how into building and property renovation.
As an aside I would also be worried about the name change. Tokyu Hands is to Japan what Cadbury’s Dairy Milk is in the UK or Australia. Can you easily take out Cadbury or Tokyu? I hope Cainz is commissioning some focus groups…