Closing four stores at once, early retirement, and clearing the consolidated deficit by new-formation merger (2004)

The nine years at Kitahama

Closing the Osaka store was the settling of an account left open in November 1996, when Mitsukoshi failed to take Umeda. Beaten by Yodobashi Camera with a bid below even the second-placed Parco, it chose instead to refit its Kitahama store and hold on to its regular customers, and went on accumulating losses away from the flow of people. That it finally folded a store with 315 years behind it suggests the judgement it had deferred, once the chance to retake the location was gone, could not be deferred any further. The ¥4bn a year the four stores were losing includes what that deferral cost.

Yet it is hard to say the company came out of the clean-up any lighter. Even after erasing ¥13.3bn of consolidated deficit with unrealized gains and cutting four stores and a thousand people, consolidated operating profit stood at roughly half of Takashimaya’s. Having spent its hidden assets first, Mitsukoshi was also left in a position where ¥100bn of unrealized land value had it named as a takeover target. Settling the past and rebuilding the core business were separate pieces of work. Two years later it gave up on reforming alone and turned to integration with Isetan.