DFS Group, the luxury duty-free store chain for international visitors, laid off about 130 workers and managers earlier this week as a result of severe declines in its primary Japanese market and overall structural changes within the company.

Japanese arrivals dropped by 20 percent in September and have dropped 9 percent year to date, according to the latest estimates from the state department of Business, Economic Development & Tourism. Last year, 970,000 Japanese tourists visited Hawaii through September; however, this year, only 879,000 came during the same period.

“;Certainly, you can see from the decline in arrivals from Japan that there has been a significant decline in our business,”; said Sharon Weiner, vice president of global communications and government relations for DFS, which operates about 40 stores throughout Hawaii.

While half of the cuts came as a result of “;a global corporate restructuring of warehousing, purchasing, management and other areas,”; Weiner said that dropping visitor counts—especially from Japan—and the dwindling U.S. economy were also to blame.

Japanese visitors have been struggling with some of the same factors that have caused a reduction in travel from the U.S. domestic market, she said.

“;There's a lack of consumer confidence in Japan,”; Weiner said. “;They have uncertainties in their own economy and have endured the same kind of severe shifts in their stock market.”;

While a favorable yen-to-dollar exchange rate has given sales a temporary boost, it has not been enough to stem the severe erosion in the overall market, she said.

“;There's been a temporary improvement in our sales. They haven't been hit quite as badly as arrivals,”; Weiner said.

DFS also is poised to see some growth in Korean shoppers as a result of a visa waiver program that goes into effect for that country on Nov. 17, she said. Likewise, DFS expects to see some gain from the Chinese visitor market as a result of a memorandum of understanding that has opened the door for leisure travelers, Weiner said.

“;However, those markets are very small for us. Even if they double, it won't make up for the drop in Japanese visitors,”; she said.

As a result, DFS has reduced about 16 percent of its about 800-person work force, Weiner said. About half of the across-the-board cuts were full-time staff, she said. Workers were notified over the last several days and all but 10 of DFS' warehouse personnel were asked to leave immediately, Weiner said.

“;We have a good transition assistance program and some employees will be eligible for severance,”; she said. “;Further layoffs are not expected at this time.”;

While the current layoffs were significant, Weiner said that DFS' largest Hawaii layoffs took place in 1997 or 1998 after the Asian financial crisis.

“;It was more than twice as many layoffs,”; she said.