C. Itoh & Co., Ltd.
List of Deals
The origins of C. Itoh & Company, Ltd., ("Itoh") are in a wholesale business started in 1860 by Chubei Itoh. By 1877 the company was one of the largest textile wholesaler-retailers in Osaka, where its first shop was opened. The company had branches in Kobe, Kyoto, and Osaka by 1885. Chubei Itoh was joined by his nephew Tetsujiro Sotoumi, and the company was named the Itoh-Sotoumi Company. This company was primarily involved in exporting textile goods through foreign trading agents.
Itoh began to expand and opened a foreign office in Shanghai, as an attempt to bypass the large commissions demanded by the foreign trading agents. In 1893 Itoh established Itoh Itomise (Thread and Yarn Store). Itoh opened an office in San Francisco in 1889. As Japan took possession of Korea in the late 1890s, the company opened a branch office in Seoul.
In 1910 a fortuitous trip to London led to changes in certain of the company's policies. The company began to avoid the prohibitive costs of Japanese foreign trading agents by ordering products directly from wholesalers in London, who did not charge such large commission fees. Itoh also began borrowing from London banks, whose interest rate was usually at least 10 percent lower than that of Japanese banks. Taking advantage of these factors, Itoh was able to undersell competitors in Japan and reinvest a larger portion of the company's profits. Itoh Itomise was then reorganized in 1914 under the name C. Itoh & Company. When the company went public in 1918, it changed its name to C. Itoh & Company, Ltd.
Japan's post-World War I economic climate enabled Itoh to grow considerably. Itoh's products were in high demand, which grew faster than they could satisfy it. By 1919 the trading division had grown to twice the size of its parent company. At that time, the company had established offices in New York, Calcutta, Manila, and four cities in China. Itoh expanded its product lines to include textiles, agricultural products, machinery, iron, steel, and automobiles. After such rapid economic growth, Japan was hit by a recession in 1920. The company borrowed heavily to cover its obligations and fell far into debt. The company reorganized in 1921 and was renamed the Marubeni Company. A division of C. Itoh Trading created a new company called Daido Trading.
The Itoh companies experienced a period of recovery during the 1930s and opened offices in Australia, Thailand, and Indonesia. In 1941 Itoh merged with Marubeni & Company and Kishimoto & Company to form Sanko K.K. In 1944 the Japanese government ordered Sanko, Daido Trading, and a subsidiary of Itoh called Kureha Textiles to merge into a new company, named Daiken Manufacturing. After World War II, Daiken was forced to divide into several smaller companies. This reorganization resulted in the following companies becoming independent: C. Itoh & Company, Ltd., Kureha Cotton Spinning Co., Ltd., Marubeni Co., Ltd., and Amagasaki Nail Works, Ltd. Itoh exported Japanese textile products on a barter basis in return for foreign grain. The trade was stable and profitable and enabled the company to establish itself quickly.
At the onset of the Korean War, Itoh, among other Japanese companies, was contracted to supply food, clothing, and other provisions to the United Nations forces in Korea. Itoh diversified its product lines to include petroleum, machinery, aircraft, and automobiles. Japan experienced another post-war recession in 1953 and 1954. Itoh survived the poor economic conditions and was able to begin large-scale lending operations in the latter part of the 1950s. The company continued to grow through the 1960s.