SAPPORO (Kyodo) Marui Imai Inc., Hokkaido’s biggest but ailing department store chain, formally selected Isetan Mitsukoshi Holdings Ltd. Thursday to sponsor its rehabilitation efforts under court supervised revival proceedings.
The Sapporo-based retailer decided on the move during a board meeting, Marui Imai officials said.
The selection means Isetan Mitsukoshi has prevailed over rival Takashimaya Co., which was also in the running to sponsor Marui Imai’s rehabilitation.
After examining the details of the two companies’ rehabilitation plans, Marui Imai was initially leaning toward Takashimaya, whose proposal granted its wish to maintain operations at all four of its retail outlets, in Sapporo, Asahikawa, Hakodate and Muroran.
But the retailer changed its stance as Isetan Mitsukoshi’s proposal was more substantive and offered a much higher price for Marui Imai’s assets than Takashimaya, according to sources close to the deal.
It appears, however, that the Asahikawa outlet will have to discontinue its operations or change their nature and quit the department store business, the sources said.
Asahikawa Mayor Masahito Nishikawa had expressed concern over the fate of his city’s outlet before the deal was sealed, telling reporters Wednesday that the bailout of Marui Imai by Isetan Mitsukoshi is “regrettable if it leads to the closure of the Asahikawa outlet.”
Nishikawa noted that the outlet’s closure would eliminate 700 jobs and affect 80 local business partners. “That would deal a heavy blow to the local economy,” he said.
In addition, the chances that the Muroran outlet will continue to operate have decreased, the sources said.
Marui Imai, which has for years languished under the weight of huge debts and diving sales, filed for court protection from creditors on Jan. 29 with the Sapporo District Court under the civil rehabilitation law.
The retailer will draw up a reconstruction program in conjunction with Isetan Mitsukoshi and submit it to the court by the deadline of Oct. 16.
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