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Seria (2782 JP - US$1.5 billion) is a family-owned Japanese discount retailer focusing on so-called 100-yen stores.
These stores are the Japanese equivalents of American “Dollar stores”, which sell a variety of items at uniformly low prices of just 100 yen (US$0.76 cents). Such items include simple clothing, kitchenware, beauty products, stationery, food, and so on.
100-yen stores have taken market share from department stores and general merchandise stores over the past thirty years. Customers are attracted by the low prices and their “treasure hunt” experience. And a reassurance knowing that whatever items they might pick up, the total bill won’t break the bank.
The market leader in Japan’s 100-yen industry is privately held Daiso, which has roughly 3,800 stores in Japan. Seria has about half as many stores, at about 1,900. While Daiso is popular among those looking for practical household items, Seria has a greater focus on design products, targeting the 30-50 female demographic.
One YouTuber called Seria, “The classiest 100 yen shop in Japan". I think that’s an accurate representation. Customers tend to praise Seria’s clean and bright store environments as well as its cute and well-designed products.
Seria has achieved great success, with revenues compounding at 10% per year over the past two decades. Thanks to margin expansion, EPS has grown at an even faster rate of about 15%. Meanwhile, Seria has earned about a 20% return on equity, which is exceptional compared to most other Japanese retailers.
Much of Seria’s current success can be attributed to the current Chairman and President, Eiji Kawai. After he joined Seria in 2003, he introduced a POS system that gathered data on orders and inventories. And later on, he also developed an inventory management system that uses advanced algorithms to figure out what products to stock at any given point in time.
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