Masatoshi Ito, founder of Ito-Yokado and honorary chairman of Seven&I Holdings, died on March 10, 2023 at the age of 98.
Ito Yokado is a “century-old store” in Japan – its predecessor was founded in 1920. It was originally a small foreign goods store in Senju, Tokyo that survived the war, with an area of less than 7 square meters. In 1958, Masatoshi Ito inherited his brother’s shop after his brother died.
Under the leadership of Masatoshi Ito, Ito-Yokado explored the “supermarket + department store” model during its development for more than 30 years, and was listed on the Tokyo Stock Exchange in Japan in 1972. In 1991, Ito-Yokado acquired 73% of the shares of American Southern Company, a company affiliated to the convenience store brand “7-ELEVEN”. In 2005, because the convenience store business had exceeded the revenue of supermarkets and department stores, Ito-Yokado officially Renamed to Seven&I Holdins (Chinese name “百和伊控股集团”).
According to Deloitte’s “2022 Global Retail Power”, Qiheyi Holdings ranked 19th with a revenue of US$52.317 billion (about 378.9 billion yuan). In June 2022, Masatoshi Ito ranked 8th in the “2022 Forbes Japan Rich List” with a wealth of US$4.35 billion.
Ito-Yokado entered the Chinese market in 1997, and successively established joint ventures in Chengdu and Beijing. It opened Ito-Yokado in Chengdu and Huatang Shopping Center in Beijing. In 2011, the 88-year-old Masatoshi Ito came to China again because of the Chengdu High-tech Store. He still insists on going to the store two or three times a week, and will also travel around Japan to visit various retail stores.
Masatoshi Ito has kept and practiced the marks given by those times.
In his autobiography “Business Feelings” published in 2006, Ito Masatoshi once said, “War upstarts, post-war speculators, products of the high economic growth period, and long-sleeved companies and financial institutions in the bubble economy era-they are all like countless The bubbles of the times rolled over in the huge waves of the times, sometimes appearing and sometimes disappearing. Whenever I think of these, I will feel more deeply the difficulty of going through that turbulent era.”
He also summed up his insights from years of ups and downs in the business world. The essence of doing business is to keep these few words in mind: “Customers will not take the initiative to buy things”, “Suppliers will not take the initiative to come to supply”, “Banks will not Take the initiative to provide you with a loan.” And these concepts of initiative and honesty have also been embodied in measures such as customer first and adapting measures to local conditions. “Close to customer needs and lead the regional trend” is the secret that Fuhiro Sanedo , the former China general representative of Ito-Yokado, constantly mentioned.
They have penetrated into the century-old development of Ito-Yokado, and have also had a profound impact on the retail industry in Japan and China.
After World War II, Japan was left with a lot of waste to do, the social economy began to grow rapidly, and the strong consumer demand promoted the development of the retail industry. It was an era of scarce supplies, and goods would be sold as soon as they hit the shelves. In the post-war recovery period and high economic growth period, affected by large-scale production and large-scale consumption, the sales volume of Ito Yokado climbed at a rate of 30% to 50% every year.
And Masatoshi Ito also keenly caught the signal of consumption upgrade.
Masatoshi Ito visited the United States for the first time in 1960 and realized that the future retail market would belong to supermarkets. He returned to Japan and took the store that was selling foreign goods at that time to transform into a supermarket. other retail sectors.
This business model integrating supermarkets and department stores was particularly advanced among the mom-and-pop shops all over the streets of Japan at that time, and it also complied with the trend of group and chain operation of the Japanese retail industry.
After coming to China, the Ito-Yokado Chunxi Road Store, positioned as a boutique store, soon became a landmark shopping mall. In 2012, the annual turnover of Ito-Yokado’s four stores in Chengdu ranked first, second, third and fifth in the world, including the Chunxi Road store. The biggest influence of Ito-Yokado on Chinese retailers lies in its advanced business philosophy and refined operation and management experience. For example, the development experience of private brands, store display and management details are the objects for most retailers to learn and imitate stores.
In addition, his innovation of the convenience store model still affects our lives today.
Masatoshi Ito’s business acumen is not only about learning the advanced business model of the United States. Under his leadership, Ito-Yokado’s localization exploration and transformation of the convenience store model even nourished the original system in turn, and achieved a counterattack.
For example, the company will check the shelves one by one to find out which products and brands are selling well and which are not, and change the display position according to customer flow habits and sales volume.
In the mid-1980s, Japan’s 7-ELEVEN also focused on developing what it called point-of-sale systems, electronic cash register devices that allowed each of its stores to closely track sales and inventory—high-tech systems that modern convenience stores manage. The foundation has also become the model that Japanese-funded convenience stores have been using since then, and has been brought into China. It can be said that part of the convenience store system that we often encounter in our daily life bears the innovative imprint of Masatoshi Ito.
After 17 years of cooperation with the Southern Company of the United States, 7-ELEVEN under Ito-Yokado has become the largest convenience store chain in Japan, with 3,940 stores. In fiscal year 1989, Ito-Yokado had sales of approximately US$12 billion and revenue of more than US$400 million. In 1991, Ito Yokado in turn bought 73% of the shares of American Southern Company, which was deeply in debt and the crisis of the American convenience store industry at that time.
7-ELEVEN store in Shanghai (photographed by Jiemian News Fan Jianlei)
But Masatoshi Ito’s turning point in the business world also came. After being involved in a scandal involving illegal payments to corporate blackmailers, he resigned as president in 1992 and became honorary chairman of the Ito-Yokado Group in 1996. In 2005, after the establishment of Qiheyi Holding Group, Ito Masatoshi served as the honorary chairman.
Ito Yokado was also gradually abandoned in the torrent of the times.
As early as 2009, Seven and Yi Holdings had proposed a plan to close 30 Ito-Yokado stores within three years. However, due to the impact of the Great Earthquake in Japan, its plan to close stores in Tohoku, Japan was not implemented, and a total of 19 stores were actually closed. . In 2015, it was announced that it would close 40 of its Ito-Yokado stores in Japan before the 2019 fiscal year (as of February 2020), accounting for 22% of the total number of Ito-Yokado stores in Japan.
The main reason for the closure of the store is that the business of clothing sellers has fallen into a downturn. In addition, the consumption tax rate was raised again in April 2017, which made the already loss-making stores worse.
A reality is that with the rise of shopping malls and online shopping, the integrated retail model of supermarkets and department stores no longer attracts young people.
In the Chinese market, Ito-Yokado closed 4 Beijing stores that could not make a profit in 2014 , and the number of stores in Beijing was reduced to 5, and then closed to the last one. In 2022, under the influence of the three-year epidemic, Ito-Yokado closed its Chengdu Chunxi store that had been in operation for 25 years. Right now, Ito Yokado has only 11 stores left in China.
Ito Yokado, whose performance is sluggish, has now reached the edge of the cliff.
On March 9, Qiheyi Holdings announced that it will close nearly 26% of Ito Yokado stores and will withdraw from the clothing business. It is expected to further focus on investing in food and convenience store businesses in the future. According to the latest medium-term business plan finalized by Qiheyi Holdings, in addition to the stores already planned to close, the company will also close 14 Ito-Yokado stores, reducing the number of stores by February 2026 from 125 to 93. In addition, Qiheyi Holdings aims to achieve an operating cash flow of more than 900 billion yen in fiscal year 2025.
Masatoshi Ito did not want to witness the fall of Ito Yokado, but he may not be able to stop the huge current outside.
Seven and Yi Holdings has been under pressure from U.S. investor ValueAct Capital to sell underperforming assets, and the fund recently urged shareholders to support a spin-off of the 7-ELEVEN brand. The “Nikkei Asia” quoted analysts as saying that as long as the founder of Ito-Yokado is still alive, it is unlikely to completely spin off Ito-Yokado. “The founders are probably the only ones who want to bring Ito-Yokado under Seven&I Holdings,” said Oshadhi Kumarsasiri, an analyst at Lightstream Research.
But with the death of Ito Masatoshi, the fate of Ito Yokado may also be rewritten.
This article comes from “Interface News” , reporter: Lu Yibei, editor: Ya Hanxiang, 36 Krypton is authorized to publish.
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