Bic Camera Inc. plans to acquire smaller rival Kojima Co. to create the second-biggest retail electronics chain after Yamada Denki Co., company sources said Friday.
Bic Camera plans to acquire a stake of more than 50 percent in Kojima via a private share issue, possibly in June, and leave Kojima listed on the Tokyo Stock Exchange with its name intact.
At a news conference Friday, President Etsuo Terasaki said Kojima will shutter 40 to 50 unprofitable stores over the next three years.
Bic Camera, ranked fifth in the industry, has nearly 40 stores in urban areas, while sixth-ranked Kojima has about 200 stores mainly in suburban areas. The two can complement each other by enhancing sales capabilities and streamlining operations, they said.
Price-cutting competition has intensified in the home electronics market following the last year’s termination of the government’s Eco-point incentive program for purchases of energy-efficient products.
Tokyo-based Bic posted ¥612.1 billion in group revenues in the year that ended last August and has been aggressively expanding. In 2010, it moved to make Sofmap Co. a fully owned subsidiary, after investing in smaller retailer Best Denki Co. in 2007.
Bic Camera is focusing on urban areas by opening megastores in front of major train stations. It also plans to open more stores in Tokyo’s Shinjuku and Akasaka districts this summer.
Kojima’s consolidated revenues totaled ¥449.4 billion in the business year that ended in March 2011. After growing on discounts, the company, based in Utsunomiya, Tochigi Prefecture, has seen sales lag in recent years because of tough competition from rivals, including Yamada Denki, prompting it to seek an alliance with a major firm.
The companies’ combined revenues exceed ¥1 trillion, which eclipses the ¥901 billion logged by second-ranked Edion Corp. in the same period.