Japan Retailers Halt Online Sales on Supplier Cyber Attack

A cyber attack on Askul Corp. is disrupting e-commerce and logistics for major Japanese retailers including Muji owner Ryohin Keikaku Co.

It’s the second such incident to unsettle the country’s consumer market in less than a month. Household goods seller The Loft Co. and Sogo & Seibu Co. retail chain have also suspended e-commerce sites.

Ryohin Keikaku, which didn’t offer a timeline for the resumption of online sales, said its own system hasn’t been compromised and store logistics and deliveries are unaffected by the incident.

The Loft Co., owned by York Holdings Co. which recently spun off from Seven & i Holdings Co., also said that resumption of e-commerce operations has yet to be determined, according to a Monday statement.

Sogo & Seibu said it halted orders and shipments of some products due to the attack and has yet to determine when its services will resume, according to a statement.

The disruptions stem from a Sunday ransomware attack that crippled the system of Askul, a Japanese seller of office supplies, forcing a suspension of orders and shipments. Askul’s shares fell 5.2% Monday, the biggest drop since early July, while Ryohin Keikaku’s shares declined as much as 6.6% in Tokyo trading before bouncing back to close 2.5% lower.

The incident comes just weeks after Japan’s largest brewer Asahi Group Holdings Ltd. suffered a cyber attack that disrupted production and shipments of its “Super Dry” beer, Japan’s most popular brew. It caused the company to postpone the reporting of third-quarter financial results. The latest disruption will raise questions about the vulnerability of Japan’s e-commerce infrastructure, especially with many retailers sharing the same online vendors.

Askul is investigating whether client or personal data were compromised, it said on Monday. The company is assessing the financial impact and may postpone the release of monthly earnings data scheduled for Oct. 28, it said.

Ryohin Keikaku’s e-commerce exposure is low and the site suspension will have limited impact on the company, said Daisuke Aiba, a retail analyst at Iwai Cosmo Securities Co. But Askul is likely to see “significant” impact to its earnings as recovery from such attacks typically takes time and may put off customers especially if the disruption is prolonged, he added.

Top photo: A Muji store at Yorkdale mall in Toronto, Canada. Photographer: Brent Lewin/Bloomberg.