• Kyodo

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Daiei Inc. founder Isao Nakauchi, once dubbed Japan’s retail revolutionary, died Monday morning of a stroke at a hospital in Kobe, the University of Marketing and Distribution Sciences said. He was 83.

Nakauchi, who had been undergoing medical treatment since suffering a stroke in late August, died at 9:30 a.m. Monday, the Kobe-based university said.

He had been serving as head of Nakauchi Gakuen, an educational corporation that runs the university, after giving up the right to represent any of the companies in the Daiei group in 2001.

Nakauchi, a native of the city of Osaka, began selling medical products in Kobe with his father after returning to Japan from World War II battlefields in the Philippines.

Nakauchi, who later won fame as a discount retailing pioneer, turned Daiei into the country’s biggest retailer in terms of sales in 1972 from a single drug store he opened in 1957 in Osaka, initially called the Housewives’ Store Daiei Co.

Daiei is credited with creating Japan’s variation of the supermarket — a store that sells groceries, clothing and a range of general merchandise.

In 1980, Daiei became the first Japanese retailer to exceed 1 trillion yen in sales.

But Daiei’s financial standing rapidly deteriorated after the collapse of the bubble economy. During the asset-inflated economic era in the late 1980s, Daiei aggressively expanded its business — from the purchase of a professional baseball team to resort hotel management.

Its system of expansion was to buy land for a new store, borrow money using the property as collateral and buy another piece of land, which would then be put up as collateral for another loan. Daiei is now rehabilitating under the state-backed Industrial Revitalization Corp. of Japan, concentrating on its supermarket business while backing off from the Nakauchi-era strategy of discounting and nationwide outlet networks.

Nakauchi’s policy of selling “a large amount of good things at cheaper prices” once served as a driving force in making Daiei Japan’s No. 1 retailer, but the strategy now fails to adequately respond to diverse consumer tastes.

In 2004, Nakauchi sold all his shareholdings in Daiei group companies to take the blame for their financial trouble. He also stepped aside from Daiei’s honorary post of “founder.”

In addition to having taken the post of chairman, president and chief executive officer at Daiei, Nakauchi served as a vice chairman of the predecessor of the Japan Business Federation (Nippon Keidanren), the nation’s biggest business lobby, between 1990 and 1995.

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