Monday, March 30, 2015

Otsuka Kagu proxy fight

A Japanese major furniture sailor “Otuka Kagu(Kagu means furniture)” held its shareholders’ meeting the other day. The company was established by Mr. Katsuhisa Otuka and now run by his eldest daughter, Kumiko Otsuka.

Katsuhisa adopted a business model where staff is accompany with customers while they see around the shop. He made much of selling high-priced luxurious furniture. However, Kumiko changed the policy and tried to make the store more open such as Nitori or IKEA.

Katsuhisa and Kumiko gradually confronted against each other and Kumiko made Katsuhisa resigned from the board of directors. As Katsuhisa is the most major shareholder, he proposed a new management and tried to pull her down.

As the result of proxy fight, Kumiko won the general shareholders’ trust and won the fight. She remains president of the company but Katsuhisa remains the major shareholder occupying 18% of the total too.

I personally agree to her opinion and support her idea that it is necessary to strengthen the corporate governance of the company. As a customer, I and my wife have visted Otuka Kagu several times and has bought some furnitures at Ariake, Koto-ku, Tokyo.

At the time (maybe 10 years ago), as Katsuhisa adoped the said system, a staff was following us while seeing around the store. For us, it was a bit uncomfortable and awkward because we could not have a private talk as the staff was nearby and also, we felt pressure that we need to buy something.

After that experience, we have never visited Otsuka Kagu again. It is not that we hate Otuka Kagu. But we are more interested in IKEA or other boutiques. I hope Kumiko lead the company to the right way and regain both customer’s trust and profit.



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