Bic Camera Inc., the nation's fifth-biggest retailer of home electronics, is buying a majority stake in Kojima Co., the seventh-largest, to create what will be the No. 2 player in the industry following behemoth Yamada Denki Co.

Kojima, once the industry leader, decided to go under the umbrella of a competitor against the backdrop of the shrinking retail market for home electronics as seen in a drop in demand for flat-screen TVs. Japan's decreasing population is also applying downward pressure on the market.

Consumers rushed to buy flat-screen TVs ahead of the switch from analog to digital terrestrial broadcasting format in most parts of the country last July.