Maruzen Co., Limited History

Address:

3-10 Nihonbashi 2-Chome
Chou-ku, Tokyo 103
Japan

Telephone: (81) 3 3272-7211
Fax: (81) 3 3274-3238

Public Company
Incorporated: 1869 as Maruya Shosha
Employees: 2,111
Sales: ¥132.3 billion (US$1.3 billion) (fiscal year ended March 31, 1996)
Stock Exchanges: Tokyo
SICs: 5942 Book Stores; 5943 Stationery Stores; 5611 Men's & Boys' Clothing Stores; 5621 Women's Clothing Stores; 5730 Radio, Television & Computer Stores

Company Perspectives:

Maruzen Company, Limited, was established in 1869 as Japan's first joint stock corporation. By importing Western publications and other goods, Maruzen took the lead in introducing to Japan information about overseas cultures. Today, Maruzen has earned a solid position as one of Japan's leading booksellers, and the company has also diversified into other areas. In information-related fields, Maruzen's business activities include providing multimedia information services, developing networks, marketing office automation equipment, and offering facilities development services. In addition, the company has a strong presence in lifestyle and culture fields, such as stationery and fashion apparel. Through its domestic network of 39 stores, 29 sale offices, and more than 70 sales outlets in universities and colleges and its overseas network of 4 offices, Maruzen is developing a diversified portfolio of business activities around its core operations in books and journals.

Company History:

With a ranking among AsiaWeek magazine's top 1000 companies of 1996, Maruzen Co., Limited is one of Japan's largest and best-known booksellers. From its initial concentration in the importation and sale of books and journals, the company has expanded into consumer merchandise and information systems. In the mid-1990s, over 60 percent of the firm's sales went to public institutions like schools and universities, with the remainder generated via retail book stores and other goods and services. While sales of monographs and periodicals are the bedrock of Maruzen's activities, the company also sells computers and proprietary software, stationary and office supplies, clothing and art. The company's activities in the service sector include providing access to electronic databases, preservation and conservation of rare books, and computer network development. According to Maruzen, the unifying theme of these diverse activities is "Creating Intellectual Environments."

Nineteenth-Century Origins

Maruzen's roots stretch back into the late 1860s, an era when Japan was evolving out of a 200-year period of feudal government under the Tokugawa shogunate. After years of isolation ended by the arrival of American Commodore Matthew Perry in 1853, Japan entered a period of rapid modernization that brought about sweeping social, economic, and political change. Established in 1869, Maruzen straddled the cusp of this cultural shift. Maruzen founder Yuteki Hayashi was urged to establish a bookstore by Yukichi Fukuzawa, an educator and stalwart proponent of Westernization. Hayashi sought out, translated, published, and sold seminal works of the Western world. The company's first store, located in Yokohama, was joined by an outlet in Tokyo's Nihonbashi section in 1870.

Originally known as Maruya Shosha, the business not only brought the concept of the joint stock corporation to Japan, but also began translating and publishing Western encyclopedias and other reference works for Japanese distribution. The company started publishing Hyakka Zensho, a 12-volume summary of European knowledge, in 1883. It also released a Japanese version of Chamber's Information for the People, another highly-regarded encyclopedia. In 1902, Maruzen added the Encyclopaedia Britannica to its list of imported publications.

Hayashi's relationship with Fukuzawa, who founded Japan's first private system of elementary and secondary schools as well as Keio University in Tokyo, formed the basis of Maruzen's strong sales to educational institutions. Over its decades of service to schools and universities, the company developed a comprehensive array of scholarly periodicals. By the mid-1890s, sales to these markets constituted more than half of the company's annual revenues. As Japan's own educational and research institutions developed, Maruzen was also well-prepared to print and distribute Japanese journals overseas.

Dawn of the 20th Century Brings Diversification

Maruzen did not limit its imports to intellectual properties. After the turn of the 20th century, it began to import contemporary business machines from the United States and Europe. The company got a foothold in the fledgling information technology industry in 1900, when it started importing and selling Wellington typewriters and American-made Monroe calculators. These early activities laid the foundation for Maruzen's later involvement in computerized databases and networks.

Maruzen also began trading in consumer goods early in the 20th century. The company started in this vein with domestic and imported stationery and office supplies. The firm expanded into clothing with an emphasis on brand-name, mostly British, apparel. In 1915 it received the country's first shipment of world-famous Burberrys raincoats. Maruzen later manufactured its own clothing, which was sold in company-owned stores and independent department stores as well as by mail order. Western-style liquor, eye wear, and even golf equipment and accessories were later added to the merchandise mix. By the mid-1990s, Maruzen was importing furniture and supplies for offices and libraries, computers, office automation equipment, educational equipment, and teaching materials.

Diversification Continues in 1960s and 1970s

During the 1960s and 1970s, Maruzen began to broaden its activities into the fields of arts and electronic information services. The company's involvement in the arts began in the early 1960s, when it hosted an exhibit of international art books. From this rather meager effort evolved the country's biggest art book fair. As it had in the past, Maruzen focused on making Western art and cultural institutions accessible to the citizens of Japan. Maruzen encouraged and assisted major museums from around the world in building Japanese annexes to their institutions. The Japanese retailer parlayed its relationships with the world's museums into a new profit center by reproducing and selling works of art. A 1990 agreement with the British Museum exemplified these efforts.

Maruzen established itself as an innovator in Japan's electronic information services industry in the late 1970s when it teamed up with Knight-Ridder Information Inc. to offer Japanese citizens their first opportunity for online access to an overseas database, specifically Knight-Ridder's DIALOG database of scientific documents. Maruzen enhanced its service to libraries with the development of the Computer Assisted Library Information System (CALIS), launched in 1985. CALIS provided library purchasing and cataloging departments with the information they needed to select, order, and catalog books and journals. This service made it easy for libraries to choose Maruzen as their book supplier. A selection of about 1,100 CD-ROMs and electronic books rounded out Maruzen's computer hardware and software offerings.

By combining its vast data resources with its computer networking expertise, Maruzen was able to design, install, and support local access networks (LANs) and other information management systems for its existing pool of library and museum clients. But it didn't stop there. By the early 1990s, the company was designing the physical environs as well, offering an integrated package including design, furnishings, computer hardware and software, and audiovisual equipment. The company later tailored these services for businesses and even competing publishers. In fact, Maruzen claims that its computer division "has been offering an MIS (management information systems) package for publishers for nearly 30 years."

The 1990s and Beyond

Maruzen expanded its operations into the preservation and conservation of rare books and documents, many of which were printed on rapidly-deteriorating acidic paper, in the late 1980s. The company started a microfilming program in 1989, and had duplicated some 160,000 volumes by 1993. Maruzen completed the filming of the National Diet Library Collection (comparable to America's Library of Congress) in 1991, thus preserving over 150,000 Meji Era books. Maruzen, which characterized this project as "a feat as yet unmatched by any other library around the world," also won a contract with the National Diet Library to sell the film collection to other libraries. The union of Maruzen's computer know-how and preservation expertise facilitated the development of a sophisticated storage and retrieval system that allowed "multiple access to up to 200 reels of microfilm in a LAN environment."

In order to highlight its preservation program and commemorate its 120th anniversary, Maruzen spent more than $5.39 million to buy one of the fewer than 50 Gutenberg Bibles in existence. Maruzen's acquisitions of other rare books--including the Hyakumantoh Dharani ("Buddhist incantations to ward off disasters") and the Rosetta Stone--saluted the company's blending of Eastern and Western cultures. The company said that these books "are representative of Maruzen's commitment to the dissemination of knowledge and are lasting symbols of the key role that the printed word has played in the development of cultures around the world."

From its earliest days, Maruzen has strived to keep pace with the ever-changing field of information dissemination. This effort has helped the company evolve from a retail bookseller into a provider of very advanced information services. Moreover, the company's creation of a retail outlet in Singapore addressed one of its most apparent weaknesses, a lack of internationalization. If Maruzen can keep up with the rapid technological changes and the growing need for international markets inherent in the modern information service business, it is well positioned to continue into the 21st century.

Principal Subsidiaries: Maruzen International Co., Ltd. (U.S.A.); Maruzen Singapore Takashimaya; Maruzen Kyoei Prince (Indonesia); Maruzen Pasaraya Sultan Agung (Indonesia); Maruzen Mega Pasaraya (Indonesia); Maruzen Jaya Jusco Bandar Utama (Malaysia).

Principal Divisions: Book Division; Journal Division; International Division.

Maruzen Co., Limited History

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