Closing 46 stores at once, and restructuring (2015)

Efficiency could be restored, but succession remained

The point of this restructuring was to refocus a store network that had swollen under single-minded expansion back onto the cities and onto efficiency. The discount model of lining up uniform big-box stores along suburban roadsides was strong while the sheer number of stores pushed sales up, but once the market shrank and shoppers moved to the cities, an efficiency that had fallen to around $13.2M (¥2bn) per store became a burden. Closing 46 stores at once was a decision that carried the pain of cutting into the success pattern Yamada had built itself. For the first time, it put a hand to the multi-store expansion that had been the very source of its strength.

The other character of this reform lies in installing a president from outside the founding family. Yet the tenure of President Kuwano — what Toyo Keizai Online called a ‘break from family rule’ — ended in two years, and management returned to the hands of the founder, Noboru Yamada. The rebuilding of efficiency produced results on the numbers, but the question of how to raise a manager who could lead the company in the founder’s place kept coming back to the surface afterward. A company that honed a discount model under a strong founder, now having to remake both that model and its own succession at once: this sequence of decisions mirrors that difficulty.