Playback: The Dismissal of Otsuka Kagu’s Second Eldest Daughter, Called the “Bone and Flesh Parent-Child Battle of the Century

What did “FRIDAY” report 10, 20, and 30 years ago? In “Playback Friday,” we take a look back at the topics that were hot at the time. This time, we bring you “Otsuka Kagu’s 46-year-old beauty president dismissed by her father in a boneheaded family feud” from the August 15, 2002 issue, which was published 10 years ago.

On July 23, 2002, a family feud erupted at Otsuka Kagu, a major furniture retailer, when Kumiko Otsuka, then 46, the second president, was dismissed by the board of directors and Katsuhisa Otsuka, the founder and father of the company’s chairman, was returned as president. The article explains the background of the situation (the statements in parentheses are quotes from past articles).

Did the daughter reject her father’s management policy?

It seems that the reason behind the sudden dismissal was the feud between father and daughter.

Although the company announced that the change was made for the purpose of “making flexible management decisions in light of changes in the business environment,” in reality, “it is believed that the father and daughter were at odds over management policy,” according to a reporter from the economics department.

It is true that Otsuka Kagu has not performed well in recent years. Sales, which were approximately 66.8 billion yen the year before Kumiko took over, dropped to 56.2 billion yen in 2001. This year, in particular, store sales plummeted after the consumption tax hike. The company is being pushed out by low-priced furniture from Nitori, IKEA, and other retailers.

Kumiko has continued to make efforts to link the Web with real stores and to remove the “high threshold” by making the showroom reception inconspicuous, but these efforts have had little effect,” said a reporter.

Otsuka Kagu has introduced a “membership system” in which member customers are served on a one-on-one basis. The company maintained its mid- to high-end line even during the deflationary period with the belief that “high-end products sell first,” a policy that continued until Kumiko became president in 2009. Did her daughter’s change of course cause her father’s “super one-man” blood to boil?

Katsuhisa, whose parents were in the business of manufacturing and selling paulownia wood furniture in Kasukabe City, Saitama Prefecture, established his own company, Otsuka Kagu Center Co. With his aggressive sales style, which was rare among furniture stores at the time, he achieved “the highest sales in Kasukabe” in one year and expanded the store. He was a good old-fashioned one-man manager whose creed was “to work happily together with employees. At one time, he entrusted the management of his restaurants to others, but after his failure during the bubble economy, he has tended to make his own decisions, no matter how small. Nevertheless, the company performed well and increased its sales to 70 billion yen in the ’00s.

In 2009, Kumiko, the eldest daughter, who was 41 years old at the time, was chosen to succeed such a great founding president. After graduating from Hitotsubashi University with a degree in economics, she worked at the former Fuji Bank (now Mizuho Bank) before joining the company in 1994. She held general manager positions in accounting and general planning. After assuming the position of president, he had been working on a new sales policy to restore the company’s sluggish performance, but he was abruptly dismissed.

However, the aforementioned journalist says that a strange situation had occurred shortly before the latest dismissal.

In October of last year,” said the reporter, “Kumiko pledged 9.75% of her shares in Kikyo Kikaku, an asset management company of Otsuka Kagu and headed by Kumiko’s sister, Maiko, as collateral, strengthening Kumiko’s influence over the company. Subsequently, at a general shareholders’ meeting in March of this year At the general shareholders’ meeting held in March of this year, while the other directors were elected with almost 100% of the shares, only when Katsuhisa was elected did a large number of abstentions occur. The number of shares abstaining from the election was exactly the same as the number of shares in Kikyo Kikaku. What happened between Katsuhisa and the sisters Kumiko and Maiko?

Kumiko told the magazine, “That (father-daughter trouble) is ridiculous. Kumiko was very quiet, saying, “It’s just as they announced.

Kumiko said, ‘No matter how good a connoisseur of furniture I become, my father says I’m not ready yet. Katsuhisa is still the major shareholder, holding 18% personally. He is the main player in the current turmoil.

Yet this was only the beginning of a family feud that was even called a “public father-son fight.” Kumiko returned to the position of president at the January ’15 board meeting after the company’s FY12/14 performance fell into an operating deficit for the first time in four years.

Katsuhisa then submitted a shareholder proposal to appoint new directors, including himself. Kumiko’s company resolved to oppose this shareholder proposal, and decided to submit a company proposal to the general shareholders meeting for a new management structure centered on Kumiko. This was an unusual situation in which a “father-son duel” was finally brought to the general shareholders’ meeting.

At the meeting, Kumiko’s proposal received 61% of the votes in favor of the company’s proposal. Katsuhisa retired as chairman and director at the end of the meeting, and left Otsuka Kagu. Katsuhisa will later return to the furniture retail business by establishing Takumi Otsuka Co.

President Kumiko was supported at the shareholders’ meeting and made a fresh start, but there was no sign of a recovery in business performance. In addition to the impact of the turmoil, it is said that the failure to repair relations with employees and business partners who had supported Katsuhisa was a major factor.’ After 2004, losses became a regular occurrence, and whispers of a possible sale of the company began to circulate, and in ’19 it became a subsidiary of Yamada Holdings.’ In 2010, the company was merged into Yamada Denki, and “Otsuka Kagu” now remains only as a brand developed by Yamada. Kumiko retired as president in December 2008.