Shirokiya

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Shirokiya Holdings LLC
Type Private
Industry retail
Founded Tokyo, Japan (1662)
Headquarters Honolulu, Hawaii
Number of locations 1
Key people Hikotaro Omura, founder
Koji Hayashi, President and CEO
Walter Watanabe, Board of director and Store Manager
Products various
Revenue $38 million (January 1, 2005)
Website www.shirokiya.com

Shirokiya (白木屋?) was one of Japan's oldest companies, as well as the largest retailer during the early 20th century. In the 1950s, it was purchased by another Japanese corporation and began an expansion overseas, primarily in Hawaii. However, in 2001, the company was largely dissolved. Today, the only remnant of the original company is the Shirokiya department store in Honolulu, a division of Shirokiya Holdings, LLC, a United States-based corporation.

Company overview[edit]

Shirokiya, Inc. (the store) is overseen by a seven-person board, all of whom own a part of Shirokiya's parent company, Shirokiya Holdings, LLC. The CEO and President is Japanese native Koji Hayashi, who also oversees the few functions of the company that still remain in Japan. Director and Store Manager Walter Watanabe, as well as the remaining directors, oversee the bulk of the operations, also serving as store senior management.

History[edit]

Shirokiya (back right) in Edo (now Tokyo) circa 1850; drawn by Hiroshige. Note the logo on the front curtain

Hikotaro Omura opened a dry goods store at Nihonbashi in Edo, (now Tokyo) in August 1662. Omura called the store Shirokiya Gofukuten, a name that would last until the 20th century. Over the next few hundred years, the store slowly expanded, and as Japan entered the Meiji era, Shirokiya and its main rival at the time, Mitsukoshi, expanded into selling clothing and other goods in 1886. In 1903, Shirokiya opened a western-style department store, followed by the creation of a larger store down the street eight years later.

The turning point for Shirokiya were a series of natural, financial and man-made disasters that devastated the company's fortunes. The first was the Tokyo earthquake of 1923 that completely destroyed the original department store building (it was then reconstructed with a modern architecture [1]). This was followed up a few years later by a major fire on December 16, 1932, which destroyed the larger building and caused 14 fatalities. Finally, Shirokiya's assets, mainly centered in Tokyo, were devastated during World War II and the following occupation of Japan, whereas Mitsukoshi, spread throughout the nation, fared better.

By 1958, Shirokiya was clearly on the downturn; despite the use of innovative marketing techniques common in the west but unheard of in Japan, Mitsukoshi had a commanding lead on the retail industry.

Tokyu era[edit]

In 1958 in order to protect itself from a hostile takeover, Shirokiya agreed to be absorbed into the Tokyu Group, a railway company expanding into the retail industry at that time. In a move to unite all Japanese stores under the Tokyu Department Store chain, the Shirokiya brand then progressively disappeared from Japanese life, culminating with the renaming of the Nihonbashi site in 1967.[2]

But the fusion with Tokyu also resulted in an oversea expansion using the Shirokiya name, that kept using it. On October 29, 1959, the first branch of Shirokiya outside of Japan was opened in Hawaii's then brand-new Ala Moana Center. The branch would later move to its present location in Ala Moana, across from Liberty House (now Macy's) in 1966. A branch store was opened in Maui in November 1973. A second branch was opened up at Pearlridge, near Pearl Harbor, on April 2, 1981.

Though the three stores were popular with both local residents and tourists, the stores had an uneven profit record. By the 1990s, as the Japanese economy collapsed, the Tokyu Group went heavily in debt, up to $470 million up to fiscal year 2001 and having in 1999 to close the historical 330 years old site of Nihonbashi.[3][4] To further save costs, Tokyu began to shed its overseas businesses, either selling them off or closing them outright. Eventually, attention turned to the Shirokiya stores, with the Pearlridge store closing in March 2001 and the Maui store shuttering in May of that same year.

Customer outcry was immense. Led by Senator Daniel Inouye, a petition signed by 30,000 residents of Hawaii and Japan was sent to Tokyu, in the hopes that Tokyu would find a fitting end to the "Shirokiya crisis". News reports both in Japan and Hawaii began to report that Tokyu would simply close all of its retail outlets and sell off its other properties and focus only on its Japanese businesses. This was compounded when Tokyu declined to renegotiate its leases for all the stores.

Modern era[edit]

In a surprise move, Tokyu in July opted to sell the Shirokiya company to the seven highest-ranking executives of the Hawaiian store for the amount of $1 (one dollar) taking a $23 million loss. The deal, which included the rights to build a future expansion at Tokyu's lone remaining Hawaii asset, the Shirokiya Department Store at Ala Moana Shopping Center, ensured the survival of Shirokiya, though there were some reports in the Japanese media about the loss of one of Japan's oldest companies to the U.S.

The newly formed Shirokiya Holdings acted immediately, by streamlining the operations and assets, and the renegotiation of the lease on the remaining store. On November 17, 2002, Shirokiya reopened its doors to great fanfare and then-Governor Benjamin J. Cayetano declaring the day to be "Shirokiya Day". The following year, on July 14, 2003, Shirokiya Holdings reported a net sales of $35 million.

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