Selling sixteen core stores to Daiei in the cash crisis — letting go of the earners, Atami included (1997)

Choosing to give up what earns

What Yaohan finally let go of — the company that had set out from a single store in Atami and flown across the world — was its domestic earners, Atami among them. Handing high-margin stores that should have been the core of any rebuilding to a competitor, in order to get past an imminent bond redemption, made sense in the logic of cash flow; in the logic of the business it was a choice to dig away the foundation of the core trade. What a company facing crisis defends first, and what it offers up, is a question this sale still puts to us today.

That Wada spoke at the press conference of continuing the China business tells you what kind of decision it was. If the order of priority placed not the domestic core but the overseas vision first, then the sale of sixteen stores was less a cause of the failure than a consequence of that ranking. Reorganisation followed six months after this purchase of survival at the price of the company’s best stores — a sequence that asks, as a matter of crisis management, how thoroughly improvised financing can destroy the seeds of a recovery.