Abstract

The case highlights the expansion strategies of Daiei Inc., a leading Japanese retailer. This expansion was funded by acquiring huge debts, which led the company face bankruptcy in the fiscal 2001-02. The case then describes the various efforts of Daiei to restructure and reduce its debt burden and explains why they were unsuccessful. It also describes the initiative taken by the Japanese government owned Industrial Revitalization Corporation (IRCJ) to help Daiei turnaround. The case then discusses the plans that IRCJ and Marubeni led consortium, which was selected as its sponsor, have for Daiei's rehabilitation. It explores the future prospects for Daiei in the light of the recent developments and also throws light upon the possible harm for the Japanese economy if IRCJ fails to deliver the desired results in the proposed time frame.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Study the domestic expansion strategies of a retailing company
• Examine how a retailing company took advantage of various political and economic situations to expand significantly
• Examine the various debt restructuring initiatives taken up by a company to become profitable and the help offered by other parties in its efforts towards rehabilitation.

Keywords

Daiei Incorporated, Corporate restructuring, Corporate turnarounds, Debt restructuring, Financial crisis, Industrial Revitalisation Corporation of Japan, Business portfolio re-organisation, Management structure, Marubeni Corporation