Japanese furniture retailer Otsuka Kagu is to become a subsidiary of electrical-appliance chain Yamada Denki following a purchase of a majority shareholding in the business.

The move follows bleak business prospects for Otsuka following poor sales and a high-profile feud among owners, as well as increased competition for Yamada in the face of strong competition from online retailers. The new alliance, to be effected on December 30, is expected to strengthen Yamada’s housing business. It will also effectively rescue the debt-ridden chain. 

The two companies have been working together since February, with some Otsuka Kagu staff transferring to Yamada Denki.

In a statement, Otsuka Kagu said it believes the partnership will “help improve the brand image of the firm as a quality furniture retailer, so deepening the ties with Yamada Denki is the best choice to increase the sales and performance in our domestic business”.

“I have the responsibility to put the company on a recovery track,” said Otsuka Kagu president Kumiko Otsuka.

“Ms. Otsuka and I share the goal of bringing Otsuka Kagu into the black in the next financial year, so I want to give her a chance,” said Yamada Denki chairman Noboru Yamada. 

“The electric appliance business has a high affinity with the furniture business, and they make an ideal combination.”