Taking control of Iwataya by tender offer while declining to invest in Marui Imai (2005)

Where the line for putting capital in was drawn

President Muto dismissed the idea of investing in Marui Imai as rumour, and said flatly that jointly developing systems and managing orders by colour and size was the more meaningful contribution. In the same year Isetan bought Iwataya’s shares through a tender offer. What separated the two was neither the size of the partner nor its region, but whether what was being handed over was a way of working. Replacing a way of working means sending in management and buying the time it takes to win the shop floor over — and that requires equity as security. Lending a system requires none.

That the distinction worked as intended is something we can only say because we know that the method took root at Iwataya. Izutsuya, which had installed the same system earlier, had nothing to show for it after three years, and there were voices saying the Isetan method could not be run with provincial staffing levels. The support offered to Marui Imai depended on whether a rebuilding plan carrying ¥27.8bn of effective insolvency and the opposition of the founding family would go through at all. A company that had said it would not go outside the Kanto region was deciding case by case how far out to send capital, people and information — and the caution of Isetan in these years shows in exactly that.