Company history

Mitsukoshi begins in 1673, when Mitsui Takatoshi opened a drapery called Echigoya in Honcho 1-chome, the busiest merchant street in Edo, in a rented shopfront one and a half ken wide. The name looked back to the family’s samurai past: an ancestor had served the Rokkaku Sasaki house, and after Oda Nobunaga destroyed it, Mitsui Echigo-no-kami Takayasu withdrew to Ise, where his son gave up the sword for trade. The shop was run by the Mitsui family and kept selling cloth on the same ground for the whole of the Edo period — as did the other future department stores, all of them Edo-era drapers: Ito Gofukuten from 1611, Daimaru from 1717, Takashimaya from 1831.

Fire pushed the store one block south to Surugacho in 1683, and Takatoshi used the move to announce a new way of selling: 現銀掛値なし — cash on the counter, and one price for everyone. The second half meant no sizing up the customer and no haggling; the first meant abandoning the custom of settling accounts twice a year and taking money at the point of sale. Together they brought in the passing trade and paid the shop in cash. Echigoya became the largest store in Edo, taking as much as 1,000 ryo in a day — the city ranked it with its other thousand-ryo trades, the theatres and the fish market.

At Surugacho the house also began money-changing, which is why both Mitsukoshi and the Mitsui bank date themselves from the same address; through the later Edo period drapery and exchange ran as the two wheels of what became the country’s largest enterprise. The split came under the new government. In June 1871 the Mitsui exchange house was named sole agent for converting the new currency — on condition that it abandon drapery and confine itself to banking. Rather than kill the founding business, the chief clerk Minomura Rizaemon accepted the condition and worked around it: three branches of the Mitsui family took the surname Mitsukoshi — from Mitsui and Echigoya — and took the cloth business with them when it was separated from the house in March 1872.

For thirty years the shop had no settled home. In 1893 Mitsui reorganized its bank, trading, mining and drapery arms as unlimited partnerships; in August 1895 the drapery was folded back into the Mitsui main house in its old form. Three changes of shape in under three decades. What the partnership years did bring was Western practice — Mitsui Gofukuten was among the first Japanese firms to hire women as shop staff, and an early user of motor trucks for deliveries.

The change that mattered was on the selling floor. In November 1895 the upper storey of the main store was rebuilt as a display floor — the first display selling of kimono cloth in Japan; the shop was renamed Mitsukoshi Gofukuten in 1896; and in October 1900 the entire building became display floor and seated selling was abolished. The old method sat one clerk in front of one customer to unroll bolts of cloth; the new one let customers walk the floor and choose. The reason was arithmetic rather than fashion: seated selling could not scale to an unknown crowd, and it broke down the moment the shop carried more kinds of goods. Nothing else could be added until it went.

In December 1904 the business was incorporated as Kabushiki Kaisha Mitsukoshi Gofukuten with ¥500,000 of capital, and in the same month issued its “Department Store Declaration” — a public confirmation of a change already finished rather than the start of one. The goods took another decade to arrive: food and horticulture departments only opened with the Renaissance-style five-storey flagship of September 1914, which the newspapers called the greatest building east of Suez. The 1920s brought the everyday-goods hall, Mitsukoshi Market, Japan’s first escalator, and the slogan “the Imperial Theatre today, Mitsukoshi tomorrow.” Then, in September 1923, the Great Kanto Earthquake burned the flagship down: losses of ¥7.375m forced capital back to ¥7m, and the emergency barrack markets put up around the city became, in time, the Ginza and Shinjuku stores.

Rebuilding turned into expansion. Capital went back up to ¥15m in October 1924, the temporary markets were converted into permanent branches, and the restored flagship reopened in April 1927 with the Mitsukoshi Hall. In June 1928 the company dropped gofukuten from its name to become simply Mitsukoshi Ltd. — twenty-four years after declaring itself a department store — and opened Kobe. Ginza and Shinjuku followed in 1930, Takamatsu in 1931, Sapporo in 1932, Sendai in 1933: six branches in six years, carrying the name across the country. Capital reached ¥30m in 1931 and the shares were listed on the Tokyo exchange; from 1932 the Mitsukoshimae subway station fed straight into the basement floor.

The Department Store Law of 1937 and the war then stopped the method entirely. The law restricted new stores and extensions — growth by opening branches was exactly what Mitsukoshi did — while rationing narrowed what could be sold, power cuts halted the escalators, and the escalators themselves were surrendered as scrap steel. At its worst, 80% of the selling floor was requisitioned. Ginza, Takamatsu and Sendai burned in air raids; Osaka and Sapporo were requisitioned at the surrender; the Keijo and Dairen branches were lost outright. The network built before the war was precisely what the war took.

Recovery was quick and then enormous. Mitsukoshi listed on the Tokyo Stock Exchange in May 1949, the day it opened, had the whole flagship back in use by 1951, and in 1954 sold $68.9M (¥25bn) — over 13% of every yen spent in a Japanese department store, from 11% of the floor space, plus nearly 30% of all gift certificates. Sales tripled and profits quintupled over the following decade, reaching $259.7M (¥94bn) in FY1966; by 1968 the company had 10,500 employees and 170,000 square metres of floor. Ikebukuro opened in 1957, Hirakata in 1968, and Paris — the first store abroad — in 1971. But the growth in retailing had moved to the supermarkets: in 1972 Daiei, fifteen years after its founding, passed Mitsukoshi with $990.9M (¥305bn) against $949.4M (¥292bn) and took first place in Japanese retailing away for good.