Leaving the department-store trade to rent space to specialist shops (1969)

He changed not the goods but the way the price was set

What Masuda Tsuji changed was not the merchandise but the way a price was set. In retailing you can repair the goods, the service and the building and still fail, because the impression the customer has formed of the store remains. If that diagnosis is right, what needs repairing is not the shop but the way money is earned. He defined the company as a real-estate business living on rent, and rebuilt its pricing from the obvious premise that a site far from a station is worth less.

Going over to the letting side, however, brought its own weight. Deposits held from tenants of ¥11.276 billion were more than 70% of fixed liabilities; borrowings rose to ¥6.54 billion and net interest turned into an outflow. The structure was one in which every new store swelled the deposits and the interest together, and whether rental income would outgrow them was not visible at the moment of the switch. Masuda himself was gone the year after the 1988 payoff scandal surfaced. The pricing principle stayed; the man who set it did not.