Daiei sells all Hawaii stores
Tokyo-based Don Quijote Co. Ltd. is buying the stores and wholesaler Oriental Seafoods Inc.
HAWAII'S FOUR Daiei stores and its Oriental Seafoods Inc. wholesaling business have been sold to another Tokyo-based retailer/wholesaler for an undisclosed sum.
The buyer, Don Quijote Co. Ltd., had 1,563 employees and 107 stores across Japan as of June. The company had net income of $65 million on sales of $2.1 billion for the fiscal year ending June 30, according to its annual report.
Both companies announced the deal in separate statements distributed yesterday at the Tokyo Stock Exchange.
Local Daiei officials received the news Wednesday; store managers were informed that night and the rest of the company's 950 Hawaii employees were notified yesterday morning, according to spokeswoman Theresa Chang.
"It will be business as usual" until the transaction closes in February, Chang said.
Daiei will take a $12.5 million charge from the sale, which it said will have no impact on its earnings outlook. Daiei (USA), which operates in Hawaii, had $155.6 million in sales in the year ending in January, while Oriental Seafoods generated $7.9 million in the same period.
Japanese news reports first disclosed the likelihood of the sale of Daiei's popular Hawaii stores in early February. At that time, the state-run Industrial Revitalization Corporation of Japan was overseeing Daiei Inc.'s efforts to overcome $9 billion in debt by selling assets, laying off workers and entertaining investment offers.
Company officials locally have received no information about the buyer's intention for the Hawaii operations.
Officials for both companies in Japan did not reply to requests for information.
Don Quijote Co. is known for what the Japan Times describes as its "chaotic store layouts and quirky merchandising."
Don Quijote was cited by the Fair Trade Commission of Japan in March for violations of forced free labor laws, by making suppliers send their employees to prepare new stores, for stocktaking and for routine product display activities. The commission also said Don Quijote forced its suppliers to "retroactively offer support money for newly opened retail outlets, with neither prior notification of the amount nor the basis for calculation, nor an accounting of how the money is used."
The discount store chain and some of its competitors were hit by a series of arson fires late last year, one of which killed three employees of Don Quijote, known in Japan as "Donki."
Founder and President Takao Yasuda tearfully offered to resign, according to news reports.
Since then, Yasuda has been named chairman and chief executive officer and Junji Narusawa, a former vice president of store operations, was promoted to president and chief operating officer. Both appointments became effective at the end of September.
Daiei has four different landlords on Oahu, including the real estate division of Alexander & Baldwin Inc. and Kaneohe Ranch Co.
A&B purchased the 176,000 square feet of land underneath Daiei Kaheka in February. The company's lease for its seven acres belonging to Kaneohe Ranch does not expire until 2022.
Bloomberg News contributed to this report