Diversification and overseas recipe deals under Yoshiteru Akita (2012)

What {{money:9000000000:2014}} of diversification left behind

Akita’s diversification was one answer to the question of where a high-margin, single-business company should look for its next growth. With a stable domestic recipe earner in hand, he read concentration on that one field as a “one-legged batting stance” and, over about two years, put roughly $85M (¥9bn) into lessons, overseas recipes, weddings and job listings to broaden the base. Revenue grew from $49M (¥4bn) to $154.8M (¥17bn) — in scale, exactly as intended. But most of the overseas recipe and lesson businesses he bought never turned into earnings, and impairments and disposals followed. That scale expanded while profit did not suggests the speed and size of the diversification may have run ahead of any deal-by-deal test of whether it would pay.

This diversification was not merely a matter of business strategy; it also became the tinder in a fight over who controlled the company. The founder, Sano, who valued concentration on cooking recipes, and Akita, who was pushing expansion across daily life as a whole, differed at the root over where resources should go. Under a capital structure in which Sano remained in the background as the largest shareholder with about 44% of the votes, that difference in direction deepened as the businesses grew. The record — diversification lifting revenue while profit failed to follow and impairments continued — became, for the side that wanted focus, material for questioning the expansion. Akita’s investment toward a platform for daily life became the direct point of contention in the fight over management control that surfaced in 2016.