Yamagataya, a long-established department store headquartered in Kagoshima City and operating the Miyazaki Yamakataya chain, is undergoing a type of private liquidation with the aim of rebuilding its business while continuing to operate, as it continues to face difficult business conditions due to the effects of the new coronavirus. It has been revealed that the company is receiving support from its financial institutions through a system called “Regeneration ADR.”
Yamagataya is a long-established store founded in 1751. According to Yamagataya, the environment surrounding the group has been affected by the combination of intensifying competition due to the expansion of large commercial facilities, capital investment such as earthquake-proofing of buildings, and the spread of the new coronavirus infection. The company has been in the red for six consecutive years since February 2018, with a total debt of 36 billion yen.
For this reason, in December of last year, Yamagataya decided to implement a national system called “Business Revitalization ADR,” a type of private liquidation that aims to rebuild while continuing business operations, through a third-party organization, citing the need to secure profitability and strengthen capital. The company has applied to this organization and is currently rebuilding its management.
Yamagataya requested support from financial institutions such as its main bank, Kagoshima Bank, and reviewed its repayment terms to reduce its debt burden.
In addition, the five-year business revitalization plan drafted by a third-party organization calls for turning some of the group companies into holdings and eliminating the entire remuneration of the chairman and president of the holdings.
Yamagataya says there will be no impact on employment.
Yamagataya and supporting financial institutions will confirm the contents of the proposed business revitalization plan at a meeting to be held on the 28th of this month.
In response to an interview with NHK, Yamagataya commented, “We will work on our own rebuilding with the support of our main bank.We want you to rest assured that our customers and business partners will not be affected.”
Regarding the efforts to rebuild the management of the long-established department store “Yamakataya,” Governor Kono told reporters on the evening of the 10th, “I have heard that there is no alternative to business continuity or employment, but Yamagataya plays an important role in the central city area.” I hope that they will continue to fulfill their roles and maintain employment at their commercial facilities.”
On the 10th, following Yamakataya’s management restructuring, customers of Miyazaki Yamakataya voiced their concerns and support.
A 55-year-old woman who came shopping with her daughter said, “To me, it’s a high-class store, so it’s unique.My grandparents used to use this store often, and I have fond memories of it.” Ta.
A 70-year-old woman who visited a Hokkaido product exhibition said, “It’s a problem if there isn’t a department store nearby.If I want to give a gift to someone I care about, I’ll go to Yamagataya, so if it disappears, Miyazaki Prefecture will be lonely.I can only say good luck.” I was sending an e-mail.
In addition, a 50-year-old man who came to buy Mother’s Day presents for his wife and mother-in-law said, “I bought my wedding ring at Yamagataya, and sometimes I used it.It’s a symbol of Miyazaki’s central city, so I will continue to do so. I want it to exist,” he said.
“Business Rehabilitation ADR” is a type of private restructuring in which lawyers and accountants selected by a third-party organization coordinate with the company and its creditors, such as financial institutions, to achieve business revitalization. This is different from legal arrangements such as laws.
The receivables covered by ADR basically belong to financial institutions and do not include commercial creditors, so there is the advantage that the company and its business partners can continue doing business even after the application is filed.
In addition, it maintains transparency and fairness similar to legal restructuring, has low risk of capital outflow, makes it easier to coordinate opinions with financial institutions, and has the advantage of speeding up business revitalization. Masu.