Clearing the department store’s “negative legacy” and returning to the core (1997)

A reform that began with an admission

What stands out in Toshimitsu’s remarks is that he located the cause of the slump not in “a lack of selling power among the staff” but in “the failure of past management judgements — the investment and expansion of the bubble years.” That a man leading the company his grandfather Toshimitsu Tsurumatsu had founded began his reform by admitting that the company’s own decisions had been wrong gives this episode a weight the 1994 shift to a “specialist large store” did not have. That he took the department store presidency while remaining an executive of the railway suggests he chose not to separate the reform from the railway’s own problem case, Tokyo Opera City, but to carry responsibility for both himself.

Clearing the negative legacy, however, did not go as the slogans promised. Against his expectation of cutting into it within three years, consolidated results stagnated in the years to March 1998 and March 1999, and the year to March 2000 ended in a net loss. The experience of Odakyu Department Store in the 1990s, playing two hands at once — specialist large store and disposal of the bubble-era legacy — shows that a railway-affiliated department store could not win on the strength of its captive corridor alone, and that cleaning up what had been expanded in the bubble took a very long time.