Tuesday, September 20, 2005


Retailer leaves
mixed legacy

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TOKYO » Isao Nakauchi, who founded supermarket chain Daiei and revolutionized Japan's retail industry, died yesterday of a stroke, a university where he worked said. He was 83.

Daiei Inc., based in the western Japanese port city of Kobe, was founded in 1957 by Nakauchi, a charismatic businessman who was praised for bringing American-style, large-scale discount retail methods to a nation long dominated by mom-and-pop stores.

Daiei grew to become the biggest Japanese retailer during the 1970s. But as imitators sprang up, Daiei fell into financial trouble and has struggled under the burden of huge debts amassed during years of over-expansion in the 1980s. It was taken over by a government-backed rehabilitation organization earlier this year.

The University of Marketing and Distribution Sciences in Kobe, which was run by an organization that Nakauchi headed, said he died in a hospital yesterday morning.

Plans for a public funeral were still undecided, although a private ceremony for the immediate family is being held, the university said.

Nakauchi was no longer involved in the day-to-day operations of Daiei after stepping down from the board in 2002, and the enormous influence over Japanese economic policy that he held decades ago vanished as Daiei fell from grace.

Before the arrival of Daiei, methods taken for granted in the United States -- such as selling cases of soda at cheaper prices -- had been unknown. In recent years, however, Daiei became a symbol of a protected mammoth company, receiving massive bailouts from the government to stay afloat.

Underlining the sweeping changes that are taking place in the world's second-largest economy, Daiei's professional baseball team was taken over by Internet company Softbank Corp.

Daiei Chief Executive Fumiko Hayashi and President Yasuyuki Higuchi praised Nakauchi's accomplishments, including the establishment of the university.

"Ever since he founded Daiei, he stood on the side of the consumer, based on the vision of a society where consumers can buy the products they want at the price they want, and he took up challenges to revolutionize retail," they said in a statement.

Nakauchi is survived by his wife, two sons and a daughter.

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