Japanese companies that have stayed in business for more than a century are shutting down one after another. A shrinking, aging population has deepened labor shortages, leaving owners unable to find successors to take over, while high inflation adds to the strain. Even firms with long histories are failing to hold on.
A total of 112 century-old companies went under in the first eight months of this year, according to data compiled by private credit research firm Teikoku Databank and reported by the Nihon Keizai Shimbun on the 16th. The tally covers companies founded more than 100 years ago.
That marks a 24% increase from the same period a year earlier and the highest figure for the period since 2007. Analysts attribute the rise in closures and bankruptcies to businesses facing management difficulties and succession problems at the same time.
Manufacturing Leads, Followed by Wholesale and Retail; Half Were Small Failures
By sector, manufacturing accounted for the most at 34 companies, followed by wholesale at 24 and retail at 22. Among the century-old firms that went under, 56 had debts of less than 100 million yen (about 850 million won), or half of the total.
The term refers to businesses that have been handed down through generations on the strength of a long history. In Japan, long-established shops and companies are called shinise. The word does not simply mean an old restaurant or a shabby store, but a business that has built up tradition and trust while passing the trade down through the family over many years.
Teikoku Databank said bankruptcies driven by a lack of successors and high inflation are continuing across a range of industries. Century-old firms are especially vulnerable to a worsening business climate because many of them are small and midsize operators, the firm said.
Japan is known for having a large number of companies with long histories. A tradition of passing businesses down through generations and a management culture that puts customers first are cited as the foundations of their longevity. But as low birth rates and population aging drag on, securing successors has become harder, and rising costs for labor and raw materials have left even these long-lived companies struggling.
Teikoku Databank forecast that bankruptcies among century-old firms could increase further, given the severe business conditions that are expected to persist.
That means even a company that has served its local community for generations will struggle to stay in business if it cannot secure a successor or absorb rising costs. Concerns are also growing that the tradition, skills and management expertise built up by Japan's century-old firms could disappear over succession problems.