Absorbing Cocokara Fine by share exchange to build a trillion-yen drugstore (2020)

Getting scale, and moving as one

What this decision amounts to is that, in a mature domestic market, the company stopped relying on opening stores of its own and took in a rival to gain scale at a stroke. When the way of selling it had built on station fronts and cosmetics had spread to everyone else, and openings no longer created any difference, Matsumotokiyoshi chose to bring in Cocokara, which had the same drug-and-cosmetics strength. What settled the contest with Sugi was the judgment that this was a partner whose store operations and private-brand work would overlap usefully. That it picked a partner with shared expertise rather than simply the largest available body tells you the character of the merger.

A trillion yen, though, is an entrance and not a destination. The work of bringing logistics and systems into one is still under way, and Matsumoto Kiyoo himself puts the progress at “60 to 70 out of 100.” Buying scale and making the bought company move as one are different problems. How the scale gained by merger is to be connected to the stated ambition of being Japan’s best at specialist drugstore retailing — how far the practical work of integration can close that gap — is where Matsukiyococokara & Co.’s next answer lies.