The holding company and the run of acquisitions (2016)

What was left after buying and bundling

To call this run of moves mere diversification misses the point. At around 780 stores Marugame Seimen’s outlets were cannibalising one another, and the repair had gone as far as bringing in Morioka Tsuyoshi from outside. A company that had risen on the completeness of a single format understood that completeness alone could no longer describe its next phase of growth — and went out to buy the time it would have taken to raise new formats itself. That is the centre of the shift; the move to a holding structure was the platform for taking in pillars from outside, kept separate from the running of Marugame Seimen.

Buying and bundling, however, promises no fruit in the year of the purchase. Not every acquired format found its footing: in the year to March 2019 impairments sank operating profit from ¥7.6 billion to ¥2.3 billion, and Awata himself restated the task as one of growing each of the companies. That the overseas business eventually grew, over years, to a scale approaching Marugame Seimen’s can be read less as skill in acquiring than as the result of devoting resources and time to raising what had been acquired. Deciding to buy the next pillar and seeing that pillar through to maturity are different jobs, and the quality of a multi-brand strategy shows up in the second.