FUKUOKA – Ailing supermarket chain Niko Niko Do Co. filed for court protection Tuesday with liabilities of 97.5 billion yen under the fast-track Civil Corporate Rehabilitation Law.
The Kumamoto-based retailer said it took the legal step, together with two subsidiaries, at the Kumamoto District Court after it failed to win financial support from its creditor banks.
It has 130 billion yen in group liabilities, Niko Niko Do said.
The midsize supermarket chain had asked Industrial Bank of Japan, Fukuoka City Bank and other creditors to forgive 35 billion yen in outstanding loans in the hope of mapping out a sweeping restructuring plan by the end of March on the basis of the debt waiver.
But negotiations did not progress, and Niko Niko Do concluded it would be impossible to rebuild the chain.
Hiroshi Tomono, Niko Niko Do president, said he and Vice President Kenyu Imada resigned Tuesday and that board member Hidefumi Kawamura assumed the presidency.
Tomono said Niko Niko Do will probably obtain support from Izumi Co., a retailer based in Hiroshima, and Fukuoka retailer Sunny Co. in its rehabilitation.
Fukuoka City Bank said in a statement that it will cooperate in Niko Niko Do’s rehabilitation as much as possible. It also said the supermarket chain’s collapse will not affect its earnings because it has set aside enough reserves against its loans to Niko Niko Do.
Niko Niko Do, which had a negative net worth of some 8 billion yen as of Sept. 30, has been trying to pull itself out of negative net worth by selling off assets, including hotels in China.
It runs 44 outlets, mainly in Kumamoto Prefecture. Niko Niko Do said it will continue operating these outlets for the time being.
The collapse of Niko Niko Do signals the gravity of the business climate surrounding local retailers, following the failure of Kotobukiya Co. as well as Iwataya Department Store Co.’s decision to rebuild itself with support from the major department store chain Isetan Co.
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