Nagoya with JR Central: a joint venture, profitable in year one (1997)

Two answers from the same company at the same moment

Takashimaya opened two flagships at almost the same time by two different methods. Shinjuku it leased the land and built itself; Nagoya it entered alongside a railway company, limiting itself to an equity stake. The results were opposites. Shinjuku fell short of half its plan and pushed back the horizon for recovering its investment, while Nagoya was in profit from its first year and cleared in four the accumulated losses it had expected to carry for twenty. The gap is not explained by the quality of the sites alone: who you partner with and how much risk you take on yourself — the design of the deal itself — is what separated the economics.

Part of what worked in Nagoya was the time that came with a railway partner. As Tanaka Kimiaki put it, the team “could think hard about what a department store ought to be, at a distance from immediate sales” — three years spent designing the floors before opening, possible because the retailer was held some way back from the investment pressure it would have borne alone. That method has its other face: it hands part of the initiative to the partner. Build alone and carry heavy rent; build together and lose discretion. What Takashimaya demonstrated across its two stores is that opening a store is not a decision about choosing a location but about designing who you go in with, and how.