Yamada Denki taking over furniture retailer Otsuka Kagu
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Japanese furniture retailer Otsuka Kagu is to become a subsidiary of electrical-appliance chain Yamada Denki following a purchase of a majority shareholding in the business.
The move follows bleak business prospects for Otsuka following poor sales and a high-profile feud among owners, as well as increased competition for Yamada in the face of strong competition from online retailers. The new alliance, to be effected on December 30, is expected to strengthen Yamada’s housing business. It will also effectively rescue the debt-ridden chain.
The two companies have been working together since February, with some Otsuka Kagu staff transferring to Yamada Denki.
In a statement, Otsuka Kagu said it believes the partnership will “help improve the brand image of the firm as a quality furniture retailer, so deepening the ties with Yamada Denki is the best choice to increase the sales and performance in our domestic business”.
“I have the responsibility to put the company on a recovery track,” said Otsuka Kagu president Kumiko Otsuka.
“Ms. Otsuka and I share the goal of bringing Otsuka Kagu into the black in the next financial year, so I want to give her a chance,” said Yamada Denki chairman Noboru Yamada.
“The electric appliance business has a high affinity with the furniture business, and they make an ideal combination.”
Questions & Answers
Q.What led to Otsuka Kagu becoming a subsidiary of Yamada Denki?
What led to Otsuka Kagu becoming a subsidiary of Yamada Denki?
Otsuka Kagu has faced bleak business prospects due to poor sales and a public family feud among its owners. This, combined with increased competition from online retailers for Yamada Denki, prompted the acquisition.
Q.When will the takeover officially happen?
When will the takeover officially happen?
The new alliance, which sees Otsuka Kagu become a subsidiary of Yamada Denki, is scheduled to take effect on December 30. The two companies have already been working together since February.
Q.What does Otsuka Kagu hope to gain from this partnership?
What does Otsuka Kagu hope to gain from this partnership?
Otsuka Kagu believes this partnership will help improve its brand image as a quality furniture retailer. They aim to increase sales and performance in their domestic business by deepening ties with Yamada Denki.
Q.How will Yamada Denki benefit from acquiring Otsuka Kagu?
How will Yamada Denki benefit from acquiring Otsuka Kagu?
Yamada Denki expects the acquisition to strengthen its housing business and sees a high affinity between the electric appliance and furniture businesses. The move also rescues the debt-ridden Otsuka Kagu chain.