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February 27, 2006
Sony's Stringer Gets His Way
Chairman and CEO Howard Stringer's plan to build a better Sony was widely panned when he announced it last September. Analysts griped that his Mr. Nice Guy approach to staff and division cuts wasn't going to be good enough to make Sony the profitable electronics and entertainment machine it once was. But in the past few weeks, the axe has fallen pretty regularly.
Sony's latest move is to sell off six of its retail business, which it will do in collaboration with investor Nikko Principal. Most people probably don't realize that the gadget maker operates importer-retailer Sony Plaza, French restaurant chain Maxim's de Paris, cosmetics maker B&C Laboratories, Lifeneo fitness centers and others in Japan, and it's unclear how much these retailers add to the bottom line because Sony doesn't offer a breakdown. (http://www.sony.net/SonyInfo/News/Press/200602/06-018E/)
But what's encouraging about the announcement is that Stringer has shown he can let go of even the most dear of Sony's legacy businesses, such as Maxim's de Paris, which was started in 1966 by the late Sony founder Akio Morita. Sony also stands to make a bit of cash in the deal, which should give Stringer resources to fix the troubled consumer-electronics unit. The financial daily Nihon Keizai newspaper (http://www.nni.nikkei.co.jp/) estimates that Nikko is paying $430 million for a majority stake. That's good news for Sony investors, who had recently been disappointed when the company suggested that its next-gen PlayStation video game console might not make it to market on time for its scheduled spring launch.
Early on, Stringer was compared to Nissan's Brazilian-born boss Carlos Ghosn, who won admiration in Japan for his top-to-bottom reforms and his ability to deliver on savings and sales promises. Ghosn was also a car buff who made sure Nissan's cars were distinctively stylish or quirky. Stringer is no Ghosn, at least he hasn't proven himself to be. Stringer's background is in media, not gadgets, and he has yet to show that he has the vision to make sure Sony's TVs and portable media players can channel all those movies and music in its entertainment library. But give him time. He seems to be doing the right things.
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