Japan’s second-largest retail group Aeon Co has posted a first-half operating profit of ¥58.26bn (US$469.3m), an increase of 9.2% from a year earlier.

Despite the slump in Japan’s retail market, Aeon has remained strong due to cost reduction, aggressive expansion and sales of cheap own brand products.

Sales for the six-month period ending 20 August totalled ¥1.49trillion, a 3.9% increase from the previous year. Sales of Aeon’s own brand products accounted for 15% of H1 sales, compared to 11.8% last year.

Aeon posted first-half group net profits of ¥19.72bn, a significant increase from the first-half net loss that was recorded last year.

Forecasts for the full year ending 20 February so far remain unchanged at ¥132bn operating profit and ¥43bn net profit.

Aeon has said that by 2005 it will close 30 stores that are making a loss, reported Reuters News.

The company is hoping that its expansion and improvement of profit margins and efficiency will enable the chain to compete with US retail giant Wal-Mart, which is planning to enter the Japanese retail market with supermarket chain Seiyu.