ATAMI, Japan — Four months after Chinese troops bloodily suppressed pro-democracy demonstrations in Beijing's Tien An Men Square, the headquarters of Yaohan International moved from the sleepy countryside town of Numazu, Japan, to Hong Kong.
The decision made Yaohan the only Japanese company listed on the Tokyo Stock Exchange to have moved its international headquarters overseas.
Yaohan Chairman Kazuo Wada, 62, said the move was religiously inspired. A former Communist who says he has meditated every morning for the last 40 years, Wada claims that he bases all his business decisions on religious principles.
"Meditation enables me to understand what I should do," said the head of the distribution company that runs 115 department stores and supermarkets through 60 affiliates in 12 countries.
Wada is a rare Japanese executive who is critical of Japan, using some of the same arguments often heard from Americans. Established as a company only in 1962, Yaohan has paralleled the uphill struggle that many foreign firms have experienced in trying to expand here, in part because of Japan's infamous Large Retail Store law. Originally designed to protect mom-and-pop stores, the law wound up protecting the interests of established supermarkets and department stores against newcomers, such as Yaohan, Wada complained.
Heaven has not always smiled upon Yaohan.
The firm's original store--a mom-and-pop vegetable shop set up by Wada's parents in 1930--burned to the ground in 1950. Its first overseas venture in Brazil in 1971, launched on the urgings of a spiritual leader, ended in bankruptcy.
Still, with often off-beat decisions, Wada has expanded his firm's global sales to $2.1 billion--including a significant presence in the United States. Now he is looking ahead to the biggest spurt ever--to $7.4 billion by 1997.
In April, after three hours of conversations with Chinese officials on his first visit to Shanghai, Wada committed himself to one of Yaohan's biggest-ever investments: about $60 million in a $100-million shopping center in Shanghai.
"I had intended to take a look at the location and, if I thought it was good, begin negotiations. But the Chinese said yes to everything I requested," he explained.
Even before the Shanghai shopping center is completed in 1995, Yaohan will open its first department store in China in Shenzhen, adjacent to Hong Kong, in July. Yaohan agreed to purchase a 49% equity interest in an existing department store that is being renovated.
In the United States, Yaohan has made a name for itself as a purveyor of Japanese and Asian food, goods and culture with markets in Fresno, San Jose, Torrance, Los Angeles and Costa Mesa. The firm procures most of the Japanese food that it sells at its American outlets from the United States and exports about $30 million worth of American food to its outlets in Japan and other Asian countries.
Yaohan also owns an Edgewater, N.J., shopping center and is planning other expansions in the United States. A London shopping center, set to open this year, will mark Yaohan's entry into Europe.
Yaohan's overseas outlets have more floor space and handle a larger volume of sales than its stores in Japan, where it ranks only 16th in sales among chain-store companies. Business in Japan, however, still represented 62% of the group's total sales of $2.16 billion last year "because of the high prices in Japan," according to Mitsumasa Wada, 53, the chairman's brother and executive vice president of Yaohan International.
Eventually, two-thirds of Yaohan's sales will come from overseas operations, he predicted.
This year, sales will grow to $2.8 billion from $1.65 billion in 1989--a period during which Yaohan has enjoyed "the biggest growth in its history," Chairman Wada said in an interview at Yaohan's Guest Housein Atami, 65 miles southwest of Tokyo. By 1997, the company hopes to hit the magic plateau--for a Japanese firm--of 1 trillion yen ($7.1 billion) in sales, he added.
New outlets and mergers and acquisitions will spearhead the expansion, he said.
Religion, the chairman insisted, remains the guiding force behind all of the expansion, although Wada as a youth firmly believed in the Marxist doctrine that "religion . . . is the opium of the people."
As a teen-ager after World War II, he wanted to be a diplomat "to work overseas and make friends with people around the world." His parents, however, made that goal impossible by sending him to schools specializing in commerce.
"My parents wanted me, as the eldest son, to take over their business," he said. "They also thought that because Japan had lost the war, there was no point in becoming a diplomat.
"I thought that taking over the family business would be the end of my life." Denied the opportunity to prepare for foreign service, "I stopped studying completely and joined the Communist Party."
