Closing unprofitable stores and rebuilding the e-commerce platform after the COVID loss (2020)

How a defensive clean-up redrew the outline of the format

This clean-up in the wake of the pandemic loss does not fit inside words like "shutting shops" or "a defensive move." It can be read instead as a conversion that re-assembled, between store and network, the very growth model of high-sensibility selection — a model that had pursued scale through assortment and service on the shop floor. The tension of the decision shows in the fact that Takeda booked the first ¥7.2 billion loss since listing, and that Matsuzaki, taking the presidency only months later in April 2021, inherited the turnaround — including the net reduction of twenty stores.

That the reform succeeded because profit returned, however, can only be said with hindsight. The profit in the year to March 2022 was ¥1.6 billion on sales shrunk to ¥118.3 billion: the effect of a lighter body appeared first, not that of expansion. Looking at the order of events — spare capacity gained by cutting stores redirected into high value-added and digital, and record sales regained over several years — the crisis can be said to have pushed this company out of the habit of measuring growth by the number of its stores.