The rebuild under Bain Capital and the return to the TSE (2011)

Who folded it, and who finished it

To read these eight years only as a company carved up and adrift under foreign funds stays too close to the surface. Going private was itself a capital policy that Yokokawa Kiwamu chose, in order to reform away from the quarterly share price and the pressure of some 50,000 shareholders. Yet the people who actually folded the unprofitable branches and rebuilt store operations were the discipline Nomura brought in and the outside executives, McDonald’s alumni among them, that Bain brought with it. The twist in this rebuild is that the one who began it left partway, and those who took it over finished it.

That said, the price tag on the company that returned to the market did not recover what it cost to take it private. A closing market capitalization of ¥221.9 billion fell short of the ¥294.4 billion just before delisting; in shareholder-value terms it did not return to the pre-MBO level. The funds’ discipline remade the earnings structure, but could not move the underlying fact of a shrinking restaurant market. For a company that has repeatedly discarded a signboard to rebuild the format beneath it, the eight years under private equity were another instance of the same practice — reworking the vessel every time a crisis arrives.