Yaohan built 450 stores in 16 countries — then Japan's largest retail bankruptcy followed

Yaohan began in 1930 as a single vegetable shop in Japan, founded by Ryohei and Katsu Wada. Their son Kazuo Wada drove aggressive international expansion from the 1970s onward, partly because restrictive Japanese retail laws made domestic growth difficult. By the early 1990s, Yaohan operated roughly 450 outlets across 16 countries — from São Paulo to Singapore, Los Angeles to London — with annual sales around ¥500 billion.

The expansion was financed by debt. Interest-bearing obligations exceeded ¥120 billion, and operating cash flow never matched the reported profits. From 1993, the company engaged in accounting window-dressing: transactions with related companies and fictitious management-guidance fees kept the books looking viable while the underlying business deteriorated. Auditing firm Chuo Audit Corporation failed to detect the fraud.

The 1997 Asian financial crisis exposed the gap. On 18 September 1997, Yaohan Japan filed for protection under the Corporate Rehabilitation Law with the Shizuoka District Court, declaring total liabilities of approximately ¥161 billion. It was the largest post-war bankruptcy in Japan's retail sector. Yaohan's stock became worthless, and 74 investors later filed a lawsuit.

AEON Group acquired the Japanese operations in December 1997 and renamed them Maxvalu Tokai. Hong Kong stores became JUSCO. US locations were bought by Maruwa, Mitsuwa and Marukai. The Macau store survived as New Yaohan under Stanley Ho's STDM. The global empire was dismantled in months.