Iconic department store Fortnum & Mason is to expand its operations in Japan in a tie-up with local department store group Isetan.

Fortnum & Mason marketing and commercial director Alison Jordan said the first shop-in-shops will open in Isetan stores later this year.

The move follows the merger of department store group Mitsukoshi – where Fortnum & Mason already has a presence – and Isetan in March 2008.

Fortnum & Mason opened its first Mitsukoshi shop-in-shop in 2004 at the Tokyo flagship as part of a joint venture.

Jordan said that ranges and locations for Isetan outlets had yet to be finalised, but that the move would give the retailer access to a younger customer base, in contrast to the more mature Mitsukoshi shopper. “We will be building on what we already do in Japan”, she said.

Separately, Jordan revealed that group sales at Fortnum & Mason are level for the year that began in July 2008 and that the performance had been achieved without sacrificing margins.

The London Piccadilly flagship is performing strongly following the reorganisation of a number of non-food categories.

The retailer has also achieved strong growth at its Heathrow T5 outlet, which opened last year. The product mix will change in the spring to include more fresh food. “We want people to be able to take a little piece of England home with them,” said Jordan.