Don Quijote leads Japan tourism push to rake in sales

Wed Oct 1, 2014 12:07am EDT
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By Chang-Ran Kim

TOKYO (Reuters) - While Japanese retailers struggle to cope with the burden of a sales tax hike, discount store operator Don Quijote Holdings aims to extend its 25-year run of rising profits by taking a different approach: turning Japan into a tourist mecca.

Foreign tourists flock to its chain of 24-hour mega-stores for midnight shopping sprees, spending on average almost 20 times more than the typical Japanese shopper. Other retailers are looking to follow Don Quijote's lead as Japan on Wednesday expands the list of items eligible for duty-free shopping.

Best known for selling everything from toilet paper to sex toys to Prada handbags, Don Quijote has long been a magnet for foreign visitors - including Lady Gaga. But with Japan ranking 33rd in the world by visitor numbers, foreign tourists made up only 3.5 percent of its revenues last year, most of that at a handful of outlets in Tokyo and Osaka.

Don Quijote now wants to boost sales further by leading an effort with hotels, restaurants and even rival retailers to promote Japan to international tourists. A company it spun off last year aims to partner with local governments and businesses to attract tourists through promotional maps and membership cards, by advising businesses to offer duty-free services and by providing language lessons for store clerks.

The move, it says, will ultimately bring more business to its 250-plus stores around the country as the government targets a doubling in the number of visitors to 20 million by 2020.

"The important thing is to create a framework that attracts visitors to Japan, and that requires cooperation that goes beyond one company or industry," Don Quijote founder and chief executive Takao Yasuda told Reuters.

SALES TAX RISE   Continued...

Japanese discount store operator Don Quijote Holdings CEO Takao Yasuda poses for a photo at Don Quijote's central branch store in Tokyo in this September 30, 2014 file photo. REUTERS/Toru Hanai/Files