Merging Mitsukoshi and Isetan into a holding company (2007)

What the last-ditch remedy left behind

At the centre of this merger was the choice of an old house that could not rebuild itself entrusting its rebuilding to a long-standing rival. For Mitsukoshi, the way to keep its name was to become the party into which its rival’s methods were transplanted; while the combination made it the largest in the country by scale, the substance of the merger came down to whether it could change its own passive constitution. Set against the Daimaru–Matsuzakaya J. Front, which moved at the same time and produced results early, the fact that Isetan Mitsukoshi expected two years before its effects appeared suggests a difference in the quality of the problems the two camps carried.

It is hard to say outright that the merger, as a last-ditch remedy, revived Mitsukoshi as hoped. The year after the first year of integration brought a large net loss, and the initial reading — that transplanting a winner’s methods would be enough — did not easily bear fruit amid weak consumption. Gaining scale and remaking an ingrained corporate culture were separate tasks. How far this decision, which put the joint holding-company structure in place first, was able to advance the fusion of the two companies became a question that Isetan Mitsukoshi would go on facing for a long time.