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Don Quijote is going through the process of buying the Marukai stores in Hawaii and California.
“A purchase agreement has been signed for Don Quijote Co., Ltd. to purchase 100 percent of the stocks of Marukai Corp. USA, ” Don Quijote Advertising Manager Liza Garcia-Mitchell said.
Garcia-Mitchell did not have details on the purchase price.
The transaction is scheduled to be completed on Sept. 30, 2013, according to Marukai Operations Manager Wes Oshima.
Don Quijote and Marukai both sell groceries and Japanese goods, among other things.
“They’re going to have pricing power, as far as purchasing, inventory to sell in the stores, because Don Quijote is so large that Marukai stores will be able to take advantage of those types of savings, creating a bigger margin,” financial analyst Randy Havre said.
It was later renamed Marukai Corp. USA, and the company currently has two stores in Hawaii and nine in California. It’s a privately owned company.
“Well I shop here about once a week and you know, I hope they don’t change anything because I like the format. It’s a little different from Don Quijote,” Aiea resident Cheryl Takitani-Smith said.
Marukai stores have members, who pay an annual fee, and receive newsletters in the mail.
Garcia-Mitchell said Don Quijote does not plan to make any immediate changes to Marukai, including employment.
“They’re going on with a strong employer so they shouldn’t have to worry about their jobs. But definitely down the road, you’re going to see reductions to attrition as they say. When people retire they won’t rehire because there will be some duplications in accounting for example, that’s the classic one,” Havre said.
Japan-based Don Quijote Company bought Hawaii’s Daiei stores in 2006.
The company, which is publicly traded, appears to be doing well financially.
“Over the last 12 months, the stock in Japan is up 90 percent. The stock in New York is up 60 percent over the last 12 months,” Havre said.
Havre thinks Don Quijote is buying Marukai for growth.
“Especially if you’re publicly traded, you need to show growth. If it’s just business as usual, your stock goes nowhere, so you want to show growth and you can only grow so much organically. Acquisition is definitely a mode is used to grow the business,” Havre said.