The major rating factors for Japan-based Aeon Co. Ltd. are as follows: A strengthened profit base, underpinned by competitive own-brand products, superior distribution and inventory control systems, and successful store opening strategies. A well-managed business and geographic diversification strategy. A slightly weak return on capital and capital structure compared with major overseas retailers, although its financial profile is improving. Severe business conditions, characterized by depressed consumption, fierce competition, and shortened product cycles. The Aeon group consisted of 146 subsidiaries and affiliates as of Aug. 20, 2002. Total sales for fiscal 2001 (ended Feb. 20, 2002) stood at ¥2.9 trillion, of which 76% came from general merchandise stores (GMSs) and other retail store operations. Specialty stores, which are treated as a
