Sugi Holdings - Company History

In December 1976 Sugiura Hirokazu, a pharmacist, opened Sugi Pharmacy in Nishio, a provincial city in Aichi. He was twenty-six, two years out of Gifu Pharmaceutical University and two years into his first job at another pharmacy. His wife Sugiura Akiko was a pharmacist too, and the couple built the shop on the only asset they had — their licences. From the first day the store did two things at once: sell medicines, health foods, cosmetics and daily goods over the counter, and fill doctors’ prescriptions behind it.

That second half was the strategic choice. Japanese drugstores in the 1980s and 1990s competed on price and floor space, and dispensing was the opposite of that business — thin-margined, staff-heavy, and dependent on a pharmacist who had to be there. Sugiura kept it as the core anyway, because he was betting on bungyo: the slow shift of prescriptions out of hospitals and into community pharmacies. Incorporated in 1982, the company opened its second store only in 1988, then began compounding — every new store a dispensing store, clustered deliberately into a dominant network across Aichi, Gifu and Mie so that advertising, inventory and stock transfers all worked harder within one tight trading area.

The compounding showed up late but sharply. Consolidated sales went from ¥8.8bn in fiscal 1996 to $271M (¥29bn) for the year to February 2000 — 3.3 times in three years — on 93 stores and 406 employees, with medicines and cosmetics carrying gross margins near 75%.

In June 2000 Sugi listed on Nasdaq Japan, the newly opened growth market of the Osaka exchange, and just over a year later, in August 2001, moved up to the first sections of both the Tokyo and Nagoya exchanges. The plan it took public was unfashionable: ¥100bn of sales and 300 stores in the three Tokai prefectures by February 2005, with a pharmacist stationed in every one of them. Analysts were sceptical that a chain could carry dispensing everywhere; Sugiura called the dispensing-equipped drugstore a business model first built in Japan and said plainly that the Tokai base was a springboard for a national chain.

National reach, when it came, was bought rather than built. In March 2007 Sugi took full ownership of Japan Co., Ltd., a Kanto drugstore chain, through a share exchange — a structure that conserved cash and converted the target’s shareholders into shareholders of the acquirer, which at Sugi’s then size was the only realistic way to buy something that large. Iizuka Yakuhin followed in February 2008. Both were later absorbed into Sugi Pharmacy itself (2011 and 2013), turning the acquired networks into directly operated stores.

In September 2008 the company split itself and became a holding company, renaming itself Sugi Holdings, with Sugi Pharmacy taking the retail business and Sugi Medical the dispensing and medical business. Two purposes converged: the acquired brands needed a single frame to be managed in, and separating the medical arm gave the dispensing push its own vehicle.

In 2009 the founder stepped back to chairman and CEO, and the presidency went to career employees from outside the family: Yoneda Yukimasa for a year, Masuda Sunao from 2009 to 2015, Sakakibara Eiichi from 2016 to 2020. It was a deliberately slow succession design. Rather than hand the company straight to his elder son, Sugiura kept final say over strategy and brand as chairman and CEO while professional managers ran the floor — and while the family’s grip on capital stayed intact, with four Sugiura family members holding roughly 12% and the family vehicle Sugi Shoji about 29% as of February 2016.

The caretaker years were spent deepening the store network rather than widening it. The Obu Center, opened in Aichi in August 2016, folded head-office and distribution functions into one site to keep logistics ahead of the store count. A capital and business tie-up with MedPeer in March 2018 connected the chain to an online medical platform, and the 2019 acquisition of HMA (now Sugi Nursing Care) took it into elderly care. The direction was vertical: from a shop that dispenses, down into home care and nursing.

The one attempt to grow sideways failed. In 2019 Sugi bid for Cocokara Fine, announcing merger talks the day after Cocokara had already agreed to explore a deal with Matsumotokiyoshi. Cocokara handed the choice to an independent special committee, which in August chose Matsumotokiyoshi. Sugi walked away and went back to building its own.

In May 2021 Sugiura Katsunori, the founder’s elder son, moved up from executive vice-president to president — thirteen years and three non-family presidents after his father first stepped back. He inherited a company already at scale: $5.6B (¥603bn) of sales and ¥34.0bn of operating profit for the year to February 2021, resting on the three pillars his father had built — the Tokai dominant network, the Kanto expansion, and dispensing in every store.

The new management pushed the vertical strategy to its conclusion, framing it as care from health management to the end of life: drugstores, dispensing pharmacies, visiting nursing and elderly care run as one system rather than as a widening store count. Sugi moved to the Tokyo Prime and Nagoya Premier markets in April 2022, and 2023 brought a cluster of deals — an alliance with Japan Hospice Holdings, a Malaysian joint venture with ALPRO, and the acquisition of Nihondo in traditional Chinese medicine.

Then, in September 2024, Sugi acquired I&H, the Ashiya-based operator of the Hanshin Chozai group and one of Japan’s largest dispensing-pharmacy chains, completing full ownership in February 2025. It was the first major acquisition in seventeen years and by far the largest ever in dispensing. Sales for the year to February 2025 reached $5.8B (¥878bn) with ¥42.6bn of operating profit, and dispensing revenue jumped 24.9%. The strain shows in the workforce: consolidated headcount rose 76% in four years to 11,820, while average tenure fell from 15.5 years to 7.1. Meanwhile the founding family’s vehicles — Sugi Shoji at 37.4% and Sugi Asset at 5.0% — have concentrated family-linked ownership to roughly 42%, unusually high for a Prime-listed retailer.