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Daimaru looking to restructure, denies merger speculation

Daimaru Inc is mulling various restructuring options to cope with increasing competition in Japan's department store market, a company spokesman said yesterday, while denying media reports of merger talks.

Japanese newspapers reported over the weekend that Daimaru was in the final stages of negotiating a merger with the department store unit of Matsuzakaya Holdings Co to create Japan's largest department store by sales.

The two firms hope expanding their operations through the merger will improve profitability amid increasingly stiff competition from suburban shopping centers and other businesses, the Asahi Shimbun said on Saturday in an unsourced story.

The merger could be completed as early as this month, according to the Asahi and Nikkei Shimbun. The Yomiuri Shimbun said the deal could wrap up by the end of next month.

Combined sales for the two companies stood at ¥1.17 trillion (US$9.79 billion) in fiscal 2005, topping the ¥1.03 trillion posted that year by current market leader Takashimaya Co, the reports said.

However, Daimaru spokesman Tadaharu Mizutani said that the Osaka-based company had not made any decisions about a possible merger.

"Generally speaking, we are always looking at ways to rationalize our business. However, nothing has been decided about a merger with anyone at this point," he said.

Mizutani added that mergers were always an option, provided Daimaru and any partner could mesh their ways of doing business in mutually beneficial ways.

Shunro Yamakawa, spokesman for the Nagoya-based Matsuzakaya, also denied the merger reports.
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