Word: daiei
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...keep them afloat. These companies came to be known as zombie firms - they appeared to be living but were actually dead, too burdened by debt to do much more than live off further handouts. One economist called Japan a "loser's paradise." The classic zombie was retail chain Daiei, which limped along for years, crushed by debt and multibillion-dollar losses, as banks kept bailing out the firm. Daiei, with nearly 100,000 employees at the time, was considered by politicians too big to fail. It was only after Japan began solving its zombie problem, rather than perpetuating it, that...
...sports cars or produce, it all comes down to service, according to Fumiko Hayashi, 58. "The key is listening to your customers," says the master marketer, who honed her retailing philosophy over nearly three decades at Honda and as president of BMW Tokyo. The new chairman and CEO of Daiei, one of Japan's largest department-store and supermarket chains, will need all that sales savvy to reverse the ailing giant's fortunes. Hayashi must prove she has the same touch in the rag trade that she had selling ragtops. --By Jim Frederick
...Indeed, ripples from the blockbuster bank merger are already reaching Japan's sclerotic retailers. To spruce up its balance sheets for the deal, UFJ is getting tough on a borrower, the ailing supermarket giant Daiei?one of the country's biggest "zombie" companies, enterprises that continue to operate despite crushing debt and chronic unprofitability. Daiei is carrying debt of nearly $10 billion. It has little hope of ever repaying, but it has always managed to convince a trio of lenders?UFJ, Sumitomo Mitsui Bank and Mizuho Holdings?to extend additional credit at crucial moments in order to keep it alive...
...Daiei's owners, who face an early-September deadline for settling on a restructuring plan with the company's three lenders, are fighting to retain control by vigorously opposing both the IRCJ's and Wal-Mart's intervention. But with blood in the water, Japanese retailers Ito-Yokado and Aeon have expressed an interest in Daiei, too, leading analysts to predict that there could also be a takeover battle brewing in the retailing sector...
...Regardless of who wins, the UFJ merger and Daiei restructuring are being hailed as progress for the Japanese economy. Even if the creation of the world's biggest bank proves as impractical and unprofitable as megamergers often turn out to be, it's likely to yield some fortuitous by-products: the disappearance of both Japan's worst basket-case bank and its most notorious corporate zombie. It also sets a strong precedent for increasingly open, shareholder-oriented corporate takeovers. By deviating so spectacularly from the Kabuki script that has governed corporate mergers for decades, the heads of Japan's largest...