Kahma abandons its 176-drugstore plan for home centres (1973)

Keep the means, replace the end

The six-company merger had been carried out in order to build a chain of 176 drugstores. It took less than a year to discover that the plan allowed "about one opening a year." The merger could have been unwound, or the company could have waited for the rules to loosen. What Kagami chose instead was to leave the shops, the people and the capital he had gathered exactly where they were, and swap the merchandise for goods to do with the home. The first store opened one year and four months after the merger. The character of the pivot shows in the speed with which the means was kept and the end replaced.

Seen from later, it was a coherent turn; at the time nothing guaranteed it. October 1973, when the first store opened, was on the eve of the oil shock, and there was no assurance that customers would take to a shop selling everything for the house together. The drugstores that were kept never became a second pillar either — thirteen stores and 2.3% of sales by the year to March 1995. Even so, the pattern that would define the company — sales floors averaging 600 tsubo, concentrated in one region to hold down distribution and administrative cost — was set by the openings of these years.