TOKYO -- Otsuka Kagu shareholders overwhelmingly backed President Kumiko Otsuka and the rest of management's nominees for board seats, rejecting a rival slate put forward by her father, the Japanese furniture store operator's founder and top investor.
Friday's general shareholders meeting was the setting for a showdown between patriarch Katsuhisa Otsuka and Kumiko Otsuka, his eldest daughter. About 200 people attended -- 10 times as many as last year.
Katsuhisa Otsuka lost his seat as chairman, while Kumiko Otsuka stays on as president.
At the meeting, the father accused the daughter of having ousted him as president in a "coup d'etat." She argued that the company's proposal, which would exclude him from the board, was a step toward better governance.
Management's board picks, which included Kumiko Otsuka, one of her brothers and a brother-in-law, won with 61% of the vote. Katsuhisa Otsuka's nominees, which included himself and his eldest son, garnered 36%. Kumiko Otsuka told reporters afterward that her side had won about 80% of the vote excluding the Otsuka family.
Shareholders were presented with contrasting business strategies. The father stands by the high-end, club-style store model that he argues had served the company well. The daughter wants to give Otsuka Kagu a more casual appeal.
France Bed Holdings, a major supplier, sided with the father. Japan's mostly small and midsize furniture makers have been worn out by competition from bigger rivals that combine manufacturing and retail, such as domestic contender Nitori Holdings and Ikea. Some see France Bed's decision as reasonable, considering that the high end of the furniture market offers the only prospect of survival for smaller players. Going into the meeting, Katsuhisa Otsuka had secured about 25% of the vote, mostly his own roughly 18% stake.
Management had assurances of about 20% support, largely Kumiko Otsuka's stake and U.S. fund manager Brandes Investment Partners' holdings. Big finance industry shareholders appear to have tipped the balance in the daughter's favor. Nippon Life Insurance, which holds a 6% stake, did not reveal its stance but said it weighed both proposals "from the standpoints of medium- to long-term corporate value and share price appreciation."
Otsuka Kagu's image seems worse for wear. One man in attendance Friday seemed bemused to have watched "a living room family argument play out at a shareholders meeting."
Speaking to reporters, Kumiko Otsuka vowed to try to regain trust through sincerity toward customers. Her new management team also needs to build a base of stable investors to fend off possible new challenges from her father, who remains the company's biggest shareholder.