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Kazuo Wada's Answered Prayers



Kazuo Wada is a devoted diarist, setting aside time each morning to put his thoughts on paper. But his is no ordinary journal. Rather than record the previous day's ups and downs, Wada writes his goals--again and again until he achieves them. "If you write down a goal, it becomes part of your consciousness," explains the deeply religious chairman of retail giant Yaohan International Group. "Then you do it." Wada, 62, has filled 40 volumes with Yaohan goals, and he has accomplished most of them.

These days, Wada's diary has much to say about America. In five years, the Japanese entrepreneur plans to put Yaohan department-store-and-grocery complexes in 20 U. S. cities. He also envisions a nationwide chain of take-out sushi bars, starting with an outlet next year in Manhattan's World Trade Center that'll feature bamboo huts and two sushi-making robots. A listing on the New York Stock Exchange is another top goal. On a visit to Wall Street last summer with a Japanese camera crew in tow, Wada strode up to the exchange building and gave it a hug. Wada's aim is nothing less than to export Japanese culture worldwide. By 1997, he vows, Yaohan will be a $7 billion empire spanning Asia, Europe, and North America.

DRIED SQUID. At the rate Yaohan stores are proliferating, Wada is well on the way. The son of a Japanese grocer, he has built the family business into an international enterprise with estimated 1991 sales of $2 billion (table). There are now 117 Yaohan outlets selling Japanese goods around the world, most of them in Japan and Southeast Asia. Eight are in the U. S., and others are going up in Britain, Yaohan's European beachhead, and mainland China. As part of a three-year, $1.2 billion spending plan, Yaohan also is expanding worldwide in shoe shops, bakeries, and Chinese restaurants.

In the U. S., Wada is targeting large communities of Asians, who account for at least 70% of Yaohan's U. S. sales. Shoppers at the spacious Yaohan Plaza in Edgewater, N. J., can stock up on pricey delicacies such as dried squid, mundane items such as Japanese brands of dishwasher soap, and typical American groceries. They can also arrange vacations at a travel agency, rent Japanese movies, check out the latest in golf equipment, and dine on sushi at a cafe overlooking the Hudson River. The other seven American Yaohans are in California. This year, in hot pursuit of America's fast-growing Asian market, Yaohan is opening megastores in Torrance, Calif., and Chicago. Future sites include Atlanta, Houston, and Washington.

Wada gets his inspiration from a little-known religion called Seicho No Ie, or House of Growth. The sect, which was co-founded by his mother when he was a child, combines Shinto, Buddhist, and Christian concepts and teaches universal love, positive thinking, and communing with God through meditation. Adherents believe prayer has a direct bearing on financial success.

Even Yaohan clerks are steeped in Wada's "truth of life" philosophy. Before being hired, applicants must take three months to absorb House of Growth scripture. Then they write three essays relating the philosophy to what jobs they will do. At spiritual training sessions, staffers hold hands and tell each other they are beautiful. Employees don't have to join the House of Growth or donate money, but membership seems to be obligatory for top managers: They're all disciples.

The Yaohan empire began in 1930 as a vegetable stand run by Wada's parents at a seaside hot springs resort. As a youth, Wada was a communist activist and wanted no part of the business. That changed when his mother got him into the House of Growth in 1951. Adopting the sect as Yaohan's corporate philosophy, he feverishly spread the grocery business and the religion throughout Shizuoka Prefecture. After flops in Latin America, Yaohan hit it big with shopping centers in such places as Kuala Lumpur, Brunei, and blue-collar parts of Hong Kong. The first U. S. store opened in 1979 in Fresno, Calif.

Wada created a stir in 1989--just four months after the massacre at Tiananmen Square--by moving Yaohan's headquarters, as well as his family and personal assets, to Hong Kong. The attraction, he says, was Hong Kong's low taxes and hub location in Asia. Wada also wanted to underscore his belief that Beijing won't interfere with high-profile multinationals when it takes over the island nation in 1997. That show of faith, Wada suggests, may have something to do with Beijing letting him bring shopping malls to China next year.

Although Wada speaks neither English nor Chinese, he became an instant celebrity in Hong Kong--a town where money talks. Yaohan spent $25 million for offices in the top two floors of a waterfront tower and thousands more decorating the interior. Wada himself lives a five-minute walk away in a modest apartment, where he rises at 4 a.m. to pray, meditate, and write in his diary. Known as a gentle boss who seldom raises his voice, Wada is viewed by his aides as part business genius and part holy man. "He believes that if we have the desire, dreams always come true," says Vice-Chairman Takanori Tsuchiya.

'MISSING THE BOAT'? That outlook will get a severe test in the U. S., where the recession has battered many better-established retailers. While Yaohan's stores have a reputation for good service and are popular with Japanese, analysts say they still aren't profitable. "They're getting better," says Tsuchiya, shrugging. New York retailing consultant Kurt Barnard, a regular customer of the Edgewater mall, thinks Yaohan is "missing the boat" by not marketing to non-Asians. "They're ignoring the tremendous amount of interest in Japanese culture and the more healthful ways Japanese people eat," he says. "Once they break out of that confining shell, they will be immensely profitable."

It's probably just a matter of time, for Wada is nothing if not eager to court Americans. When New York sought money for its June 10 victory parade for the troops, every Japanese company politely declined. When the Japanese Consulate in New York turned to Wada, he promptly kicked in $100,000. As ticker tape showered upon General H. Norman Schwarzkopf and his troops, Wada gazed proudly down from the VIP booth. Everything was going according to plan. "I will have a big success in New York," he had written in his diary that week. "I will have a big success in New York."



8 grocery/department stores in U.S.; 3 Chinese restaurants



92 department stores/supermarkets in Japan


4 megastores, with two more under construction


20-unit Chinese restaurant chain in Hong Kong


Catering outlets, cake shops, Italian shoe factory


17 Yaohan stores in Southeast Asia and Latin America; Malaysian tourist resort

DATA: BWPete Engardio in Hong Kong, with Peter Finch in Edgewater, N. J.

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