The failed Saks bid and the ¥90 billion Ikebukuro enlargement (1990)

A reckoning thirty years in the making

Having missed its chance to own a famous department store abroad, the Tobu group can be read as concentrating capital on the west side of Ikebukuro in order to assert its presence at home. That a group whose stated creed was conservative management should hand down two large decisions — the Saks bid and a ¥90 billion enlargement — within roughly a year of each other says something about the investment climate peculiar to the bubble. Even granting that the impulse to make good a foreign failure with domestic investment is understandable, it was the scale and the timing, coinciding with the peak just before the collapse, that sealed the burden to come.

That said, one cannot simply reduce the 1992 decision to a failure. The enlarged floor space remained in the group as a device for drawing crowds to a railway terminal even as the department store format declined, and the asset value of the west exit itself was not lost. The weight of an investment written down once in 1998 and rationalized again in 2001 is now being recovered in a different form, as the redevelopment of the west exit of Ikebukuro station in the 2020s. A single capital-allocation decision taken in the bubble years appears to be still on its way to a verdict, thirty years on.