A bitter family feud at a leading Japanese furniture chain [IDC Otsuka] took a dramatic turn on Friday as its acid-tongued founder failed to oust his own daughter as president after a highly charged shareholder vote.
The spat has captured headlines for weeks as 71-year-old Katsuhisa Otsuka gave his daughter a public dressing down last month, saying he was sorry for having a “bad child” who committed “terrorism” with her tit-for-tat bid to boot him from the board of Otsuka Kagu.
On Friday, investors cast their vote on the duelling proposals with 61% backing daughter Kumiko, 47, to stay in the top job, a result that the older Otsuka blasted as treasonous.
Flanked by his wife and a slate of male executives supporting his bid, the company’s chairman introduced himself as the man “dethroned as president in a coup d’etat.”
“What have I done wrong? If anything, it was in appointing her as CEO six years ago,” he said. “I’m disappointed.”
By contrast, his stone-faced daughter apologised to shareholders for the family tempest, saying the company needed to improve its governance standards and rebuild a brand that stretches back four decades.
Otsuka, a former cabinet salesman, started the Tokyo-based chain in 1969.
“One day, members of the founding family need to leave their company. This is the only way companies can survive,” his daughter told shareholders.
The fight erupted when Kumiko, a former consultant, was dismissed in July last year after five years running the company - she was credited with turning it around by moving away from her father’s business model.
The elder Otsuka took over running the company for six months - later saying it was a mistake to appoint his daughter as president - but the board re-installed Kumiko in the job as the firm suffered its first loss in four years.
The pair were deeply split over the future of the chain’s membership-driven business that focuses on premium furniture and customer service.
Interior design consultants roam the shops to help customers at 16 storefront locations across Japan, in sharp contrast to local rival Nitori and Sweden’s IKEA, which focus on do-it-yourself budget furniture.
Otsuka’s earnings have waned over the past decade in the face of rising competition from its budget rivals, but the father refused to abandon the chain’s strategy.
That view got little support at the meeting on Friday where some shareholders said changing the decades-old formula was crucial.
“The chairman’s way of running the… stores is outdated - I came here hoping there would be a change” in management, said one 75-year-old investor.
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Some interesting reader's comments:
Himajin wrote:We have one in Kobe, we've bought a couple of pieces there. You have to register, and you're assigned a staff person who accompanies you while you shop. A lot of the furnishings are imported from the U.S. or England and they kind of wow you with the displays, but few can afford those prices, and with the furniture from England (enormous sofas and desks) or fit the pieces into their houses. Of course all of the furniture isn't that expensive, or big, but the atmosphere contributes to the feeling that you should only go if you're going to do serious shopping, or if you want to just browse you should go elsewhere. They have reasonably-priced furniture but the over-the-top stuff has dominated for decades. This kind of business model, ie., extreme pampering of the customer, and guiding them through their purchases, and the snob appeal of registration, appealed to those of my in-laws' generation.
I like the fact that they have designers on staff, but more good quality, mid-priced furniture and less baby-sitting by staff would be great, and I think that the daughter is trying to take it in that direction. She has been redoing the store layouts, getting rid of the imposing check-in desks, and making the floor plans more open. Prices have come down too. I think she's doing the right thing.
And (where did I see this name before?)...
Cyka Enkabaani UchuuJin wrote:As a manufacturer of Danish design furniture, we found their style under Kumiko unacceptable and fired them last year as dealer. There's no doubt that they have a place in the everyman furniture market, but they use brands like the one I work for to showcase, and then lead people to the cheaper stuff, which is where they make their money. They also discount 10% off RRP set by manufacturers, which prompts people to go browse and try in other dealers and then go to IDC for the best price. A practise which has made them hated among other dealers in the country. The reason many get the feeling that it's not a place to browse is because they assume you've already seen what you want elsewhere and come to them for the sale.
It will be interesting to see her next move. IDC have severely dropped in quality the last few years, even on the higher end items. Perhaps the PR generated from this public dispute though may help them a little.
small profits and quick returns direction just makes them throw themselves into excessive competition. either way, dead end. 
They've actually gone deeper into the 'look at this beautiful stuff, now we'll show you the cheap crap from China' game.
