Aeon Co. Ltd. (A-/Negative/--) holds one of Japan's largest retail networks offering various types of retail formats and leading brand recognition. The company maintains a strong business profile supported by its pursuit of cost reductions and its engagement in product development and procurement, which leverages economies of scale. Although shopping center development and services business underpin the company's overall revenue to a certain degree, GMS operations account for a larger proportion of the company's total earnings compared to other Japanese general retail groups. Consequently, the rapid economic deterioration that occurred after the autumn of 2008 had a pronounced impacted on the performance of Aeon's GMS operations, placing its overall income and cash flow under downward pressure. Aeon is aiming to
