Boots took its UK store format to Japan, opened four shops, and admitted a £25m mistake

Boots, the British pharmacy and health-and-beauty chain, was an early foreign retailer to try Japan. In 1998 it set up a joint venture with Mitsubishi Corporation — the operation was called BMC — and began an ambitious push to plant the Boots brand in a big new market. Mitsubishi supplied local muscle; Boots supplied its name and its store model.

The model was the problem. The Japanese shops were built on the Boots UK Health & Beauty format — large Western-style outlets. Japan's own drugstores are smaller, denser and run on thin margins, and the Boots stores were costly and slow to find shoppers. In the end the venture opened just four shops: three in Tokyo and one in Yokohama.

The losses mounted. The operation lost £12 million in one year and a further £3 million the next, and closure would cost about £10 million more. In July 2001 Boots announced it was closing the stores, conceding that Japanese shoppers loved the brand but not in the form of UK-type health and beauty stores. It called the venture a £25 million mistake.

Boots did not abandon Japan outright — it shifted to a lower-cost approach, putting its own brands such as No7 inside other retailers' space, the model it had used for eight outlets in Taiwan. The case is now a staple of international-business teaching: a strong brand and a strong local partner cannot rescue a store format the market does not want.