The rating on AEON Co. Ltd. (formerly Jusco Co. Ltd.) reflects the company's growing strength in the Japanese market and its expertise in forging tie-ups with prominent foreign retailers. In addition, the rating takes into account AEON's successful merchandising strategy involving the effective use of group purchasing power and direct sourcing from overseas. Despite higher funding requirements resulting from its active capital expenditure plan in the near term, Aeon's credit profile is expected to improve in the long term provided the company maintains its focus on improving profitability. AEON is Japan's third-largest general merchandiser in terms of consolidated sales, with 372 superstores nationwide and a total retail space of 2.98 million square meters as of February 2001. Retail businesses, including
