Daimaru Inc. and Matsuzakaya Holdings Co. announced in 2007, that they would integrate under a joint holding company in September to create the nation's biggest department store group. The new retailing giant Daimaru Matsuzakaya opened for business this Monday now bringing the fruition of the huge merger to its customers.

The two companies' combined sales of 1.166 trillion yen in the business year to February 2006 top the 1.031 trillion yen posted by industry leader Takashimaya Co. Osaka-based Daimaru and Nagoya-based Matsuzakaya said they will set up a headquarters for the holding company in Tokyo.

Dating back in 2007, Daimaru, which operated 16 department stores nationwide, was the fourth-largest chain in the industry. Matsuzakaya was the eighth-biggest, operating nine outlets mainly in Nagoya, Tokyo and nearby cities.

Daimaru and Matsuzakaya continued operating their stores under their established names after integrating. The decision to merge was prompted by falling department-store sales caused in part by expanding supermarket and shopping-mall operators and the falling fertility rate.

Their integration is hoped to trigger further realignment in the retail industry. Daimaru and Matsuzakaya said they will try to cut operating costs and attract popular brands to their floors. They also said they will try to enhance operations in Tokyo.

The new chain,  combined under holding firm J. Front Retailing Co.. It will take over strategic planning and product procurement duties from J. Front to save costs amid the current deflation. (JapanTimesOnline)