Japan furniture magnate fails to oust daughter in family feud

Japan furniture magnate fails to oust daughter in family feud
President of Japan's Otsuka Kagu furniture chain Kumiko Otsuka answers questions during a press conference after its annual shareholders' meeting in Tokyo on March 27, 2015.

TOKYO - A bitter family feud at a leading Japanese furniture chain 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 per cent 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".

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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