Shirokiya gets new owner

By Andrew Gomes
Advertiser Staff Writer

The Japan-based parent company of Hawai'i's Shirokiya specialty department stores said last night that it has sold the company to a group of former and present managers who will keep open Shirokiya's flagship store at Ala Moana Center.

Shirokiya's flagship store at Ala Moana Center will be the last remaining one in Hawai'i. Its new owner is closing the Shirokiya store on Maui. Advertiser library photo • January 2000

The Maui closure will come two months after the closure of Shirokiya's store at Pearlridge Center on O'ahu, and will leave the longtime retailer with just one Hawai'i store.

The sale announcement by Tokyu Department Store Co. ends more than a year of uncertainty for the retailer's employees, estimated at 150. It also assures loyal customers that Shirokiya, which has imported unique Japanese merchandise to Hawai'i since statehood, will continue to do so.

Sale terms were not disclosed. The new owners have an option to extend the Ala Moana lease, which expires in 2003.

"We can all let out a sigh of relief now that the deal is done," said Walter Watanabe, Shirokiya assistant manager. "But only for a moment. We are now an independently owned company and must work twice as hard to continue to serve our customers and attract new ones."

Tokyu had been negotiating a possible sale with Shirokiya managers for about a year. Tadatoshi Suzuki, a former Shirokiya vice president and general manager in Hawai'i, is coming out of retirement and moving back to the state from Japan to become chairman of Shirokiya Holdings LLC and president of Shirokiya Inc.

"It's a homecoming," he said.

Shopper sentiment

Longtime customers on O'ahu said last night they were relieved by the buyout, but sad to hear that the Maui store will close.

Scott Crockford, real property vice president for Queen Ka'ahumanu Center general partner Maui Land & Pineapple Co., said he is sorry to see the 28-year tenant go.

"I think Shirokiya is an institution on Maui and they will be sorely missed," he said. "It always had an eclectic mix of goods in the store — electronics, prepared foods, beauty products — I think it just fit in real well with the Maui lifestyle."

Fifty employees at Maui Shirokiya will be offered the opportunity to work at the 40,000-square-foot Ala Moana store or receive severance pay, the company said last night.

Crockford said he's working to re-create the "best of Shirokiya" at the mall.

He said it was too early to release details.

On O'ahu, Shirokiya loyalist Joanne Ninomiya, who organized a customer petition with 26,000 signatures urging Tokyu to reconsider an earlier decision to close or sell the stores, was relieved that the Ala Moana store would remain.

"Losing the store would have been like losing a friend — it's become a part of our culture," she said.

Under economic cloud

Tokyu has been pressed to restructure operations and eliminate debt as it continues to do business in a struggling Japanese economy. The company has closed stores in Tokyo, Hong Kong, Singapore, Thailand and the U.S. Mainland. In January 2000, Tokyu announced plans to sell its last remaining stores, the ones in Hawai'i.

The announcement stunned Hawai'i residents and moved high-ranking state officials to write letters to Tokyu executives to try to save Shirokiya. But retail analysts said the store leases offered little value, and therefore little hope for a potential buyer.

Late last year, Shirokiya overhauled its Ala Moana store, refocusing on high-end Japanese merchandise and trimming expenses.

Sales improved and losses fell by more than half. But Shirokiya remained in the red, and its future in Hawai'i was still questionable. Earlier this month, the company closed its Pearlridge store after 20 years.

'It's understandable'

When Roger Lyons, retail specialist at commercial real estate firm CB Richard Ellis Hawai'i Inc., heard that Tokyu decided 14 months ago that it would try to sell its Hawai'i Shirokiya stores he thought it was the "logical end" for the specialty department store.

He was surprised that Tokyu found a buyer, though he said keeping the Ala Moana store made sense.

"It's understandable for someone to keep an Ala Moana store open because traditionally the sales volumes are so high at that center," he said.

Shirokiya was founded by Hikotaro Omura in 1662 as a notions store in what is now Tokyo. The business was acquired in 1958 by Tokyu Department Store, a subsidiary of the 500-company real estate and transportation conglomerate Tokyu Group.

Tokyu brought the retailer to Hawai'i in 1959 as a charter tenant at Ala Moana Center. Shirokiya sold everything from 5-cent chopsticks to a $4,000 ceremonial teahouse. In 1973 Shirokiya expanded to Kahului and in 1981 opened its third store, in Pearl City.

"Tokyu has given us the chance of a lifetime to be able to continue Shirokiya in the Hawai'i market," Watanabe said.

Andrew Gomes can be reached by phone at 525-8065, or by e-mail at agomes@honoluluadvertiser.com