Every year, chimes ring out across Ginza as the New Year's Eve countdown begins. This is the soundscape of an annual event that Wako began playing from the clock tower of its Ginza main building in 1983. 2013 also saw new chimes ring for Ginza's commercial facilities, signaling Abenomics and the 2020 Tokyo Olympics. This interview with the head of a retailer in Ginza, Japan's leading commercial district, as it moves toward a new era, offers an overview of 2013, predictions for 2014, and thoughts on 2020. Our first guest is Tatsuhiko Adachi, who was previously manager of the Mitsukoshi Ginza store and became Wako's senior managing executive officer in April of this year, and assumed the role of representative director and president in June. --You joined Wako in April, but could you give us your overall review of 2013? Looking at the calendar year, sales for 2013 are expected to exceed 116% of the previous year's results. Perhaps it's the effects of Abenomics, or perhaps the rising stock prices and weak yen are appealing to the wealthy who rely on stocks. In December, news broke that the number of foreign tourists reached 10 million, and inbound sales are certainly growing in the Ginza and Shinjuku districts. The number of Chinese tourists has returned, and we're seeing an increase in customers from Southeast Asia, including Singapore, Indonesia, Malaysia, and Thailand. While department stores likely keep official figures, I've heard and experienced an expansion in their sales composition, from the previous 3-4% to nearly 10%. Our duty-free watch sales in October and November were 10 times higher than last year, with 70% coming from China. --How do you see this by product? Sales of watches, especially those on display on the first floor, are booming. This is Seiko's birthplace, and it's also its flagship store. Grand Seiko watches are highly rated, selling well despite being expensive items averaging around 400,000 yen. Pre-orders for the new GPS solar watch "Astron," launched in 2012, are also underway, with items in the 200,000 yen range selling well. Women's handbags are also selling well, with 70% currently being WAKO's original brand, a perennial favorite for formal occasions. Watches and jewelry account for 30-40% of the total, and all categories are outperforming the previous year. Food is also doing well, although figures are difficult to compare due to last year's renovation. Their popular chocolates, which they've been producing since 1988, are produced in an atelier near Ginza. Cakes are baked on the third floor of the same building as the sales floor, making for a self-contained operation. I think they should further promote the freshness of their "Ginza-made" products.

--John Lobb men's shoes were introduced in October. It's not widely known that women's clothing is available on the third floor and men's clothing on the fourth floor. While it is certainly not their intention to make the store intimidating, their location in Ginza 4-Chome, primarily selling luxury goods, does give the impression of being intimidating. Currently, the store primarily carries imported men's brands, including Isaia, Herno, and Boglioli, and offers custom-made and pattern-made suits. For the past two years, they have also been handling custom orders from Kenjiro Suzuki, a Parisian who gained experience as a chief cutter at Francesco Smalto. For women's clothing, they carry domestic brands such as Mikako Nakamura and Support Surface, as well as imports such as Agnona, Cividini, Fabiana Filippi, Herno, Missoni, Lena Lange, and Cruciani. Similar to the cashier system of established department stores, the store has focused on providing attentive service to its loyal customers. However, as its customer base ages, the store has recently been gradually introducing new products. One example is John Lobb. To ensure stable growth, the store aims to increase new customers by approximately 30%.

While 50% of our women's clothing is original to Wako, we focus on standard items and are particular about materials and sewing. This results in high demand for alterations, including handbag and watch repairs. Many customers trust the high level of craftsmanship of our makers and artisans and have long-standing relationships with us. While cherishing this brand image, we are also reconsidering our media approach, such as inserts in magazines and newspapers, which we had not actively promoted in the past.

--Aren't the social trends of Cool Japan and Made in Japan also a tailwind for Wako?

Original products made in Japan are also a distinctive feature of the Wako brand, and we are grateful for the growing appreciation of Made in Japan products. It is also important for us to seek out better products domestically.

--How about reaching younger generations?

Our bridal engagement rings, wedding rings, and betrothal watches are popular, and we are chosen by customers even in Ginza, where you can find all the jewelry you need. We hope to use these products as an introduction to deepen engagement with the younger generation.

--The transformation of Ginza is already underway in preparation for the 2020 Tokyo Olympics. What is your outlook for the future of Ginza?

The population of Chuo Ward is increasing year by year, and when you cross Kachidoki Bridge and look out at the skyscrapers, Ginza feels like the gateway. With the Olympic Village planned for construction in Harumi, expectations for the revitalization of the Ginza area are likely growing. In that sense, it may be a little different from the overall trend of Japan, which is a declining birthrate and aging population. With the Tokyo Metropolitan Government and Chuo Ward currently planning a new transportation system that will connect Ginza with the waterfront area (Kachidoki and Harumi districts), including a BRT (articulated bus) and LRT (light rail), and the relocation of Tsukiji Market, the Ginza area is expected to undergo major changes.

--The Ginza Building Height Limit has been revised from 31m to 56m, and many earthquake-resistant buildings are planned along Ginza Street. Currently, there are numerous redevelopment projects underway, including Itoya, the former Toshiba Building site in 5-chome, and the Ginza 6-chome redevelopment project on the site of the Matsuzakaya Ginza store. Is Wako considering any measures to maintain its status as a Ginza landmark?

Seismic reinforcement work on the main building was completed five years ago, and we will continue to develop this building, which was completed 81 years ago in 1932, with branding that takes advantage of our location in 4-chome, "Wako of Ginza." To achieve this, it is important to develop and promote original products that are not available at other stores. To that end, we are actively venturing outside the company. In 2013, we opened a store as a manufacturer in the food section of the Mitsukoshi Nihombashi Main Store for one week in the summer, from December 26th to 31st, on the first basement floor. We have a strong customer affinity with the Mitsukoshi Nihombashi Main Store, and our cakes seem to sell well. We also plan to have Wako chocolates at a Valentine's Day event on February 5th. --What about collaborations with other long-established Ginza stores? We've always wanted to partner with the Ginza area to make an impact, and this summer we participated in the "Ginza Chocolate Cream Fruit Dorayaki" project at the Mitsukoshi Ginza store. This collaboration involved Ginza Bunmeido baking the dough, Ginza Sembikiya filling the fruit, and Wako's chocolate cream. We sold a limited run of 200 dorayaki per day, and they sold out every day. Creating buzz like this is essential. Printemps Ginza also joined Ginza Fashion Week this year, but we need to create a system that allows more Ginza stores to participate. To achieve this, we need to work on it as a district-wide initiative. As Wako deals in fashion, we hope to participate. --Finally, what are your predictions for the period after the consumption tax is implemented in April 2014? We expect that the consumption tax will have a 4-5% impact on sales in the year following its implementation in April. We predict that the first three months will be even tougher. We believe it will be difficult to achieve double-digit sales growth for the calendar year, as was the case in 2013 when the economy was on the mend. Ultimately, we would be happy if we could land on a 4 to 5% increase.