The rating on Aeon Co. Ltd. reflects the company's leading position and brand recognition in Japan's retail market, strong ability to quickly implement improvements to operations despite the economic slump, and strong performance in shopping center development and services businesses. These strengths are partly offset by difficult business conditions--due mainly to the stagnant economy following the Great East Japan Earthquake, which struck on March 11, 2011--sluggish employment and household income, and an oversupply of stores in the domestic retail business. The company also has a high dependence on debt and a somewhat weak financial profile for the current rating. We see the company's financial profile remaining weak for the current rating, for the next one to two years, even if
