Bookoff Group Holdings — Company History

The buyback model that broke the trade's habits: anyone can appraise

In May 1990 Sakamoto Takashi (坂本孝) opened the first store, BOOKOFF Sagamihara Kobuchi, in the city of Sagamihara, Kanagawa Prefecture. The used-book trade of the day rested on connoisseurship: a practised eye judged a book's scarcity, whether it was a first edition and the state of its binding, and set a price copy by copy — a closed market in which both buying and selling were work for experienced specialists. Sakamoto broke with that appraisal culture and built a format run on three principles and nothing else: buy at 10 per cent of the cover price and sell at 50 per cent; polish each copy back to something that looks as good as new; and turn stagnant stock through a flat ¥100 shelf. Pricing on how dirty a book was rather than on what was inside it made the buyback appraisal a task a part-time worker could carry out.

In August 1991, to buy and sell used books, The R Co. (㈱ザ・アール, capital ¥10 million) was established in Sagamihara, and from October of the same year it began rolling out BOOKOFF as a nationwide franchise chain. The pace of that expansion was exceptional for the Japanese retail sector of the 1990s, and a system was built to give every franchise applicant a single package: a buyback manual, a store-operations manual, a POS system and a distribution network. In June 1992 the company changed its name to Bookoff Corporation. Running franchise and directly operated openings side by side, the network grew past 800 stores nationwide in the second half of the 1990s.

Widening the range of goods, and rapid growth through the IT bubble

In October 1994 the company began buying and selling used CDs (compact discs) and used videos. Extending the format beyond books to anything that was a packaged product with a cover price and could be resold once polished up was a judgement that rode the waves of the late 1990s — a shrinking CD rental market and an expanding market in used software. In July 1997 it merged with Bookoff Corporation (formerly Tachibanaya, 旧㈱橘屋), the nominal surviving company, tidying up the corporate structure to match the rapid expansion of the decade. In April 1999 it began handling used children's goods, and in October it established BOOKOFF U.S.A. INC. to run BOOKOFF stores in the United States, taking the chain overseas.

In January 2000 used sporting goods were added, in April used clothing and used accessories, and in December the composite store BOOKOFF Chuko Gekijo Tama-Nagayama (BOOKOFF中古劇場多摩永山, now BOOKOFF SUPER BAZAAR Tama-Nagayama) opened. A composite store handling books, CDs, videos, children's goods, sporting goods and clothing under one roof was positioned as a format distinct from the book-focused stores that had come before. In February 2002 the company established Bookoff Logistics (ブックオフ物流㈱, absorbed into Bookoff Corporation in April 2014) to supply and store goods and fixtures, building the distribution network that a nationwide chain required. A mechanism for moving stock between head office, franchisees and directly operated stores underpinned both the growth in store numbers and the widening range of goods.

The 2004 Second Section listing, and the founder's departure in 2007

In March 2004 Bookoff Corporation listed its shares on the Second Section of the Tokyo Stock Exchange — fourteen years after the first store opened in 1990, and thirteen years after franchising began. In March 2005 it moved up to the First Section, becoming the first listed company on that board from the reuse industry. Consolidated sales at the time of listing were above $462.3M (¥50bn), with two pillars supporting the results: membership fees and royalties from franchise operations, and sales from directly operated stores. In the same period Hashimoto Mayumi (橋本真由美), who had supported the shop floor as a part-time employee since the founding years, became President and COO in June 2006, in a joint structure under which the founder Sakamoto served as CEO.

In April 2007 the company began handling used hobby goods such as plastic models and figures, and in August its subsidiary Bookoff Online Co. (ブックオフオンライン㈱) started running BOOKOFF Online, a reuse shop on the internet. Running physical stores and an e-commerce site in parallel was a measure to layer customer contact points on both the buying and the selling side. In June of the same year, however, the founder Sakamoto resigned as chairman and then left the company altogether. Behind this lay the matter of rebates received from several business partners, and the founder's departure was intended to draw a line under the governance question. After leaving, Sakamoto founded the restaurant business Ore no Italian (俺のイタリアン), turning to chain business in a different sector.

After the founder's departure, Sato Hiroshi (佐藤弘志), formerly of McKinsey and a Bookoff employee since 1997, became president in June 2007. Sato set out a second founding through composite used-goods stores, pushing the BOOKOFF SUPER BAZAAR composite format and an entry into new-book retailing — in November 2008 the company took over from Yohan Book Service (洋販ブックサービス㈱) the new-book business operating Aoyama Book Center and Ryusui Shobo. Combining new books with used books meant a shift towards becoming, as the phrase went, a general trading house for reuse, at a moment when the book-retailing industry was being reshaped.

Establishing the LOVE USED brand, and the struggle in new books

In November 2009 the first composite store to carry the BOOKOFF SUPER BAZAAR name, BOOKOFF SUPER BAZAAR Kamakura Ofuna, opened. At over 1,000 tsubo (roughly 3,300 square metres), handling used books, CDs, games, clothing, sporting goods and hobby items in a single store, it was positioned as a format apart from the mid-sized stores that had dominated until then. In October 2010 the company established B-Assist Co. (ビーアシスト㈱) to promote the employment of people with disabilities across the group, and in December of the same year it was certified as a special-purpose subsidiary by the Ministry of Health, Labour and Welfare — a measure tying social responsibility in employment to the hands-on work of the reuse trade.

In June 2011 President Sato stepped down and Matsushita Nobuyuki (松下展千), formerly of the Industrial Bank of Japan and a Bookoff employee since 1995, became the fourth president. Matsushita put LOVE USED at the centre of the group's branding and pushed to unify it as a comprehensive operator in the distribution of used goods. In December 2011 the company began handling used mobile phones, extending reuse into electronic devices. In January 2013 it acquired part of the shares of its franchisee Bookoff With Co. (㈱ブックオフウィズ) to make it a subsidiary, and in April it established Hugall Co. (㈱ハグオール) to run a reuse business not confined to the store format (absorbed into Bookoff Online in March 2018).

The new-book retailing business made only a limited contribution to earnings, and through 2014 and 2015 a run of restructuring followed: the TSUTAYA business (31 stores) was transferred to Nippon Shuppan Hanbai, and 22 stores including 20 directly operated ones were closed or exited. In the results for the year ended March 2015 the company closed 22 stores including 20 directly operated ones and booked withdrawal losses, and in the year ended March 2016 it gave notice that six more would close in the following year — a continuous clearing-out of unprofitable stores. Sales-promotion methods, and the whole approach to sales and service vouchers, were rethought from the ground up, shifting from store-by-store promotion to group-wide promotion, but improving the margin took time.

The 2014 Yahoo capital tie-up, and the pure holding company

In April 2014 the company concluded a capital and business alliance agreement with Yahoo Japan Corporation. Yahoo took up newly issued shares and convertible bond-type bonds with share options through a third-party allotment, and Bookoff explored links with Yahoo's reuse and C2C platforms, Yahoo Auctions and Yahoo Shopping. The aim of the alliance was to build a store-and-e-commerce reuse business, including reuse running in the opposite direction — goods bought over the counter at physical stores and sent out online. In May 2015 Bookoff acquired all the shares of its franchisee Booklet Co. (㈱ブックレット) to make it a subsidiary, and established Bookoff Okinawa Co. (㈱ブックオフ沖縄) to run BOOKOFF stores in Japan.

In January 2016 the company acquired all the shares of Booklog Co. (㈱ブクログ), which ran a domestic book-review community site, making it a subsidiary; and in July, under a shareholders' agreement concluded between three parties — Bookoff, Koike Co. (㈱コイケ) and KOIKE MALAYSIA SDN. BHD. — for the purpose of running reuse stores in Malaysia, it invested in BOK MARKETING SDN. BHD., which KOIKE MALAYSIA SDN. BHD. had established, making it a subsidiary. In November the subsidiary BOK MARKETING SDN. BHD. began operating the reuse store Jalan Jalan Japan OneCity in Malaysia, extending the overseas business into the Asian market. In April 2017 the company acquired all the shares of its franchisee Manas Co. (㈱マナス) to make it a subsidiary, continuing to bring the franchise network under direct head-office ownership.

In April 2017 President Matsushita stepped down and Horiuchi Yasutaka (堀内康隆) was promoted to president. The company had already fallen to net losses for two consecutive years in the years ended March 2016 and March 2017 before Horiuchi took office, and the year ended March 2018, his first year, brought a third consecutive net loss as impairment losses and an income-tax adjustment from reversing deferred tax assets were booked. Horiuchi set out four pillars of policy: a fundamental overhaul of the Hugall business, selection and concentration among buyback channels, shrinking the distribution centres, and exiting unprofitable stores. In the year ended March 2019 the fundamental overhaul of the Hugall business was made a pillar of the medium-term management policy, distribution was integrated with the Bookoff Online business, and in the reuse store business 12 directly operated stores were exited under criteria for withdrawal that were now written down. In October 2018 Bookoff Group Holdings Co., Ltd. was established by sole share transfer as the wholly owning parent of Bookoff Corporation. At the same time the capital and business alliance agreement with Yahoo Japan was dissolved, the bonds with share options were redeemed and treasury shares were acquired. The Yahoo capital tie-up, which had run for about four years, was wound up under Horiuchi because the vision of an integrated store-and-e-commerce reuse business had not progressed as expected. Withdrawal from the Hugall event-sales operation Tokyo Furugi (東京古着) and the closure of unprofitable stores continued, as loss-making operations were cleared away.

A changed year-end, and reshaping the portfolio through M&A

In January 2019 the subsidiary Bookoff Corporation absorbed the subsidiary Bookoff Online Co. In September it acquired all the shares of Jewelry Asset Managers Co. (㈱ジュエリーアセットマネジャーズ, absorbed into Bookoff Corporation in June 2022) and Aidect Hong Kong Limited (liquidation completed in April 2023), entering the reuse of jewellery. The results for the year ended March 2020 set out the One BOOKOFF concept, putting the omni-channel link between stores and e-commerce into full effect, and the shares of JAM — Japan Market Enterprise — were acquired to make it a wholly owned subsidiary.

In June 2020 the company changed its financial year-end from 31 March to 31 May each year. The year to May 2021, the transitional period for the change, ran to fourteen months, and in the year ended May 2021 consolidated sales were $851.7M (¥94bn), operating profit $17.3M (¥2bn) and net profit $910,913 (¥100m) — profitability held despite the effects of the pandemic. The point of moving the year-end was to bring the busy season generated by demand around the start of the new school and business year in April and May inside the financial year, and to minimise the slippage of matters that straddled year-ends. In the same period store closures under the state of emergency and impairment losses of $5.5M (¥600m) on subsidiary goodwill and fixed assets had put the previous period into loss, but the ordinary profit target of ¥3bn in the medium-term management policy was maintained.

In December 2021 the company established BO Chance Co. (㈱BOチャンス) to run Japan TCG Center, a specialist trading-card store in Japan. It was the launch of a specialist format catching the growth of the trading card game (TCG) market, and in August 2022 the group opened Asobiba AEON Mall Wakayama (あそビバイオンモール和歌山店), its first specialist store bringing together things to play with — trading cards, game software and the like. In April 2022, under the Tokyo Stock Exchange's revision of its market segments, the company moved from the First Section to the Prime Market, and continued to meet the requirements of sustainable growth expected of a listed company.

Multi-store expansion abroad, and building the Premium Service business

In October 2022 the group opened its first store in the Republic of Kazakhstan, the franchised Jalan Jalan Japan Zhetysu Semirechye. Following Malaysia, it was an overseas move that established a format for capturing demand for used Japanese goods in emerging markets. In January 2023 the company expanded the functions of its e-commerce site Hugall Fashion (ハグオールファッション) and opened rehello (リハロ), an e-commerce site handling branded goods and fashion and collectible items. In August of the same year it declared its support for the recommendations of the TCFD (Task Force on Climate-related Financial Disclosures), and in November it drew up a green loan framework and raised funds through the first green loan by a reuse chain.

In April 2024 the group established the joint venture J&K TRADING LLC in the Republic of Kazakhstan, its first, and in July of the same year that joint venture opened Jalan Jalan Japan Aksai in Kazakhstan — the group's first directly operated store there. The shift from franchisee to direct operation marked the stage at which the overseas business began contributing directly to group earnings. In the year ended May 2025 consolidated sales were $796.5M (¥119bn), operating profit $22.7M (¥3bn) and net profit $14M (¥2bn), reaching one and a half times the level of the year ended March 2019 before the pandemic (sales $741.2M (¥81bn), operating profit $14.7M (¥2bn)). Overseas sales grew from $30.4M (¥4bn) in the year ended May 2023 to $41.4M (¥6bn) in the year ended May 2025, while the Premium Service business (the former Hugall and Aidect lines brought together) recorded sales of $48.1M (¥7bn) and operating profit of $2.7M (¥400m), slightly above the year ended May 2023.

The 2024 fraud disclosure, and year two of the medium-term policy

In August 2024 the company disclosed that fraud by employees — fictitious buybacks and improper recording of inventory, among other things — had come to light at several stores run by a subsidiary, reporting the progress of its internal investigation, and on 15 October 2024 it published the investigation report of the special investigation committee (public version). The investigation concluded that no organised fraud was found and that the amounts involved were limited, but special investigation costs of $3.7M (¥550m) were booked. President Horiuchi held to the policy for year two of the medium-term management policy: aggressive store openings in the domestic Bookoff business and continued expansion overseas (the United States, JJJ in Malaysia and the joint venture in Kazakhstan). At the same time the company drew up a new medium-term management policy running to the year ending May 2028, taking as its banner delivering the finest reuse experience and placing the transformation of the business portfolio through M&A at the centre of management.

For the year ending May 2026 the company set out a plan to open 12 to 13 new stores overseas, continuing multi-store expansion abroad through the BOOKOFF business in the United States, the JJJ business in Malaysia and its operations in Kazakhstan. In March 2025 it acquired $21.6M (¥3bn) of treasury shares, and for the year to May 2026 it planned a year-end dividend of ¥30, an increase of ¥5, strengthening returns to shareholders. The special investigation costs of $3.7M (¥550m) relating to the fraud uncovered in the previous period fell away, while impairment losses on stores continued. The company raised the ordinary profit target of the medium-term management policy, whose final year is the year ending May 2028, to ¥5bn and set out a policy of concentrating on making the strategic business areas — the specialist trading-card stores and the living-support business — earn.

The business structure of the Bookoff group as at 2025 rests on three axes: the domestic Bookoff business (sales $697M (¥104bn), profit $35.4M (¥5bn)), the Premium Service business (sales $48.1M (¥7bn), profit $267,290 (¥40m)) and the overseas business (sales $41.4M (¥6bn), profit $4.7M (¥700m)). The chain business that began in Sagamihara in 1990 with a format as simple as buying at 10 per cent of the cover price and selling at 50 has, thirty-five years on, changed into a composite reuse company holding stores, e-commerce, overseas operations and specialist formats. Having passed through three turning points — the governance crisis of the founder's departure in 2007, the misfire of the Yahoo alliance between 2014 and 2018, and the fraud disclosed in 2024 — the question that remains for Horiuchi's management over the medium term is how, in competition with flea-market apps and the C2C market, the advantage of reuse that keeps a shopfront can be established.