Kosuke Kitamura: Blowing a New Wind into the Furniture and Interior Industry

I believe our originality lies in a triple combination of our stores, our products, and the people who serve our customers. In other words, we assemble each of these elements uniquely, and their combination further enhances our originality.

Among these, "people" is particularly significant. We adopt a consulting proposal style; we don't just recommend items. We believe furniture and interiors are tools to create "experiences" (koto) that allow customers to live comfortably and feel uplifted at home. We call this "selling experiences" rather than just "selling things."

For example, we ask what kind of lifestyle the customer wants. When they are replacing furniture, we listen carefully to what kind of space their home is and what colors would be best before proposing the best answer. There are not many stores with this style in the furniture and interior industry.

That's right. For example, at the request of condominium developers or house makers, we create spaces to stage model rooms. We also work on offices, hotels, and co-working spaces, creating various commercial spaces according to the needs of customers who want to make their spaces stylish. There are not many companies that enhance spatial value by developing such businesses while focusing primarily on retail.

We have established the philosophy of "Making Japan an advanced nation in terms of Space-Time Value." Space-Time Value means feeling the value of the time spent in a space, but as you pointed out, Japan is unfortunately still a developing nation in this regard.

I think there are two reasons why furniture and interior culture hasn't flourished in Japan. One is that the time spent at home is short. Japanese people are hard workers, and "outside" sectors like the restaurant and entertainment industries are overly developed. In Europe, when you talk about where a family eats, it naturally refers to the home. Restaurants aren't even open on Sundays. The Japanese lifestyle is fundamentally different from these countries, and the degree to which people spend money on things inside the home is low.

The other reason is that no matter how stylish they make the inside of their homes, Japanese people don't show it to others. There is no culture of home parties, and there's a mindset that there's no point in spending money on something others won't see. In contrast, in places like Europe, there are regular opportunities to replace sofas or plates.

Rather, Japanese people spend money on things visible to others, like cars, watches, and bags. In Europe, very few people drive luxury cars; everyone drives a single car until it falls apart. To those people, the Japanese consumption style of replacing a new car every three years must be unbelievable. Within these cultural differences, we want to make it possible for people to enjoy the time they spend in their spaces.

It has changed 180 degrees. After all, fathers are now at home. After the first state of emergency was declared in April-May 2020, I think almost every furniture store saw increased profits from June through December. However, in 2021, as staying at home continued, demand went through a full cycle, and the general trend was a slight overall decline compared to the previous year.

But we were able to grow in 2021 compared to the previous year. I think this is important. Analyzing this, general furniture stores are often street-level shops where most visitors come for a specific purpose. In contrast, LIVING HOUSE, which opens stores in commercial facilities, can reach people who aren't "purpose-driven" customers. I think this is the result of being able to draw out potential demand through customer service proposals from people who just happened to stop by.

We opened five new stores after the start of the pandemic. We saw the withdrawal of apparel brands as an opportunity and moved into the resulting vacant lots. Increasing the number of stores is a good cycle because it increases our bargaining power.

When I graduated from Keio, I had no intention of taking over the family business at all. But I also didn't want to go to a large company like my classmates were joining. I had a preconception that if I entered a company with many peers, I wouldn't be able to utilize my individuality. I wondered if a company where it takes decades to reach a position to make important decisions would be interesting.

That's right. When I took over as president from my father, he told me, "I don't care if you change the company name or do other things, but I want you to carry on the management philosophy." That philosophy is "To create comfortable living spaces and build the prosperity of furniture and interior culture," and those words from my father might have been significant.

The slogan we have now, "Toward an advanced nation in Space-Time Value," and new businesses like flower subscriptions and home appliance sales, are my own ways of taking and materializing the philosophy of "creating comfortable living spaces" from the previous generation.

What I call "Space-Time" is a term I used to replace what my father originally called "Living Space." Even if you just say "space," it's not just for living; there are commercial facilities, public spaces, vehicles, hospitals, and more. I wanted to be able to approach any space without being restricted to just "living," and I wanted to expand the business horizontally, so I changed the wording like this.

A space only gains meaning when people spend time there. The nature of that time varies—for example, time spent sleeping in a bedroom or time spent working in an office. If you think about business as a combination of space and time, the field expands indefinitely. No matter how it expands, it leads to the improvement of interior culture that my father championed. I am currently thinking about how to expand horizontally while properly carrying that over.

For example, when we work on a hotel project, we don't just want to create a nice hotel; we want to enhance the value of the time for the people spending it there. I feel there are things we can do not only for hotels but also for hospital spaces and nursing care facilities where people who are not necessarily in perfect health spend their time.

I am trying to turn a 1 into a 3 or a 5, whereas entrepreneurs are creating 1 from zero, so I think they are amazing in that regard. But I also feel it's not a matter of which is better or worse. I have a foundation from the previous generation, but at the same time, there are parts that get in the way. I have also experienced the difficulty of changing those things.

That might be because my desire to use my individuality is stronger.

I have a desire to show my individuality, but I don't think my ideas will definitely be accepted. The consumer is always at the center, and the perspective of what people living their lives think when they make consumption choices is important. I think I have a stronger customer perspective than most.

I thought that if I was seriously considering opening stores overseas, I needed to "go native," so I lived in Jakarta for a month in August 2019.

During this time, I visited every furniture store and commercial facility in Jakarta, and looked at many apartments and model rooms to research the local housing situation. Having people introduce me to various contacts, including acquaintances from my Keio days, was also a big help, and I was able to gather a lot of information.

My motto is that footwork carves out your life. Up until now, there have been many times when I was glad I actually went somewhere and met people. It's faster to move than to worry about whether you should go or meet someone. The intuition that tells you "I should go to this" within a limited amount of time also gets refined with experience.

LIVING HOUSE often opens stores in large-scale commercial facilities, but I was hearing that street-level tenants were starting to become vacant due to the impact of the pandemic. So, I went around Tokyo by bicycle with my employees.

Information from real estate agents is enough if you just want to know about store vacancies, but what's crucial is the foot traffic at different times of day and the operating status of other stores. I want to know that kind of area information through my own senses. We started riding in the morning and went around central areas like Aoyama, Harajuku, Shibuya, Daikanyama, Ebisu, and Nakameguro for six hours non-stop.

Cars waste a lot of time looking for parking. With a bicycle, you might encounter unexpected properties on backstreets. I am always conscious of the so-called "Three Realities Principle" (San-gen Shugi): the actual place, the actual thing, and the actual reality.

It's quite different. Originally, it was a project where I had declined the request to open a store once. My first impression was that it was more like a supermarket than a department store, and it had already been decided that the department store would withdraw. However, local dignitaries bought the commercial facility because the town would fall into decay if it collapsed.

But the situation was tough, and while thinking of reasons to decline, I spoke my mind, saying, "The department store business model is impossible in a regional city. Why not narrow it down to only sharp, specialized shops and make it a 'Thirty-Store' (Sanjukka-ten) instead of a 'Department Store' (Hyakka-ten)?" Then, the president of the other party said, "Mr. Kitamura, instead of opening a store, please produce an entire floor."

I had never done work on that scale and was honestly bewildered, but I felt this might become interesting, so I decided to accept. We will fully renovate the top floor of the five-story building and renew it into a floor that proposes a new lifestyle. It is scheduled to open in August. Of course it's a business, but it's also regional revitalization. Since everyone involved is truly passionate, we want to do our best as well.

Our store will be in there, but I will also handle the selection of products and displays for the remaining parts operated by the department store. When you think of a department store, you imagine Baccarat glasses and Wedgwood teacups lined up, right? Strangely, every store looks the same. But even within Wedgwood, there are modern and stylish products that are different from the classics. I proposed actively featuring such items to change the image.

Since we are creating a radical floor that would be unthinkable for a regional department store, there are challenging aspects, but in a city of 150,000 people, I dared to target the young generation in their 30s and 40s rather than trying to please everyone.

By doing so, we might lose some customers, but we will attract people from a wider area and expand the trade area from 150,000 to 500,000. To achieve that, I thought we needed a sharp lineup that would make customers want to visit. When I made that proposal, they went along with it. I think their decision-making is also amazing.

I often joke that I spent four years on summer vacation at Keio, but during my time as a Keio students, I was in a golf club. That club had classmates who gathered from various regions, and there were particularly many from Fukuoka and Nagoya.

One of them was a producer at a TV station in Fukuoka, and when LIVING HOUSE opened its first store in Fukuoka, they covered it. I have club friends and acquaintances in every region, and our interaction has continued after graduation. I wasn't a diligent student, but I think entering Keio was very good for my subsequent life as a businessman.

I entered Keio through a recommendation. My high school was a combined junior and senior high school for university prep, and I was in the baseball club during high school, but my grades were just barely short of what was needed for a Keio recommendation. Even so, I thought that continuing my club activities might be a plus, so I studied frantically after retiring from the club. As a result, the fact that I stayed in the baseball club until the end was also a reason I was able to get a Keio recommendation slot.

In the Faculty of Business and Commerce, I belonged to Professor Norikazu Kudo's seminar, but during my fourth year of university, I went on a three-week backpacking trip through Europe despite it being during the semester. Students don't have money, so I aimed for a time when airfare was cheap (laughs). Since I wouldn't be showing my face for three weeks, I spent the whole trip thinking about what to say to the professor. When I went to report to him after returning, he was a very kind professor who laughed and forgave me.

I was a Keio students who really didn't study, but I think this period was an invaluable time when I was able to refine my sensibilities. Even if I went back to that time in a time machine now, I would probably do the same thing.