The end of Goto-family personal rule and the cleanup of bubble-swollen non-core businesses (1995)

When the blessing of land ran out

At the heart of this decision was the question of how to move a management that had leaned on the personal command of the founding Goto family, and on development gains premised on rising land prices, toward a management run by the organization. The Tama Garden City’s development gains had at once permitted a looseness about profit and loss and an expansion into non-core businesses. The bubble’s collapse broke that premise, and the death of Chairman Noboru Goto left a vacuum where the centre of gravity had been. The special loss of $456.1M (¥43bn) was a figure that forced the settling of both at once. The character of this cleanup shows in the fact that Tokyu did not narrow its focus voluntarily amid good times but let go of the non-core under the lash of losses.

Even so, the cleanup itself bought Tokyu time on defence. Lightened by shedding the non-core, Tokyu gathered resources onto its own terminal, Shibuya, and won the footing to advance to the redevelopment from Shibuya Hikarie onward in the 2010s and to the shift to a holding company in 2019. The system in which the organization, rather than the founding family’s gravitational pull, carries the management runs all the way to today’s structure of moving railway and real estate on separate decision lines. On what does a company blessed with land and land prices rebuild once that blessing runs out? The 1990s, when the Goto family’s kingdom ended, can be seen as the distant starting point of today’s Tokyu management, which prizes capital efficiency.