Business / Corporate

Japan sportswear firm Descente appoints new chief from Itochu after rare hostile takeover

Kyodo

Sportswear maker Descente Ltd. said Monday it has appointed a new head from top shareholder Itochu Corp., effective in June, after the trading house succeeded in completing a hostile takeover earlier this month.

Descente President Masatoshi Ishimoto, a member of the company’s founding family, will be replaced by Shuichi Koseki, senior managing executive officer in charge of Itochu’s textile division, pending shareholder approval at the annual meeting in June.

The move reflects a major concession on the part of Descente, which owns the rights to sell such brands as Le Coq Sportif, Munsingwear and Umbro in Japan and other parts of Asia.

The firm apparently wanted to avoid dragging out its feud with Itochu further, which could put its brand image in peril.

But among Descente employees, strong opposition persists to Itochu’s increasing influence, even though it helped the company overcome difficult times in the 1980s and 1990s.

In the hostile takeover bid, Itochu successfully increased its stake in Descente from 30.44 percent to 40 percent through a tender offer bid conducted from Jan. 31 to March 14. The trading house now has veto power over crucial management decisions.

The dispute between Descente and Itochu, which have had ties for over 50 years, arose as the trading house sought to change the sportswear maker’s overseas strategy.

Itochu has said Descente is too dependent on its South Korean business and that it should diversify, such as by strengthening sales in China. It also hinted the current president would be replaced if Descente remained opposed to changing course.

Ishimoto, 56, was appointed president of Descente in 2013, marking the first time in 19 years that a member of the sportswear company’s founding family had taken the helm instead of an Itochu-appointed chief.

Koseki, 63, who joined Itochu in April 1979, has been responsible for the trading house’s textile business and operations in China for many years.