Japan's century-old businesses are closing at a record pace

Japan’s historic, century-old businesses are shutting down at a record rate. In the first eight months of 2026, 112 companies with histories spanning more than a century filed for bankruptcy, according to data from the research firm Teikoku Databank.

These firms, known as shinise, have spent generations building up deep capital reserves. Most survived World War II and the bursting of Japan's economic bubble in the early 1990s. Yet the pressures of a post-pandemic economy, marked by rising costs and a severe labour shortage, are proving to be a challenge too far.

Why historic firms are failing

Many of these older companies rely on thin margins and operate purely within their local domestic markets. This makes them highly vulnerable when import prices rise.

Consider Sube Shoten, a tofu manufacturer founded in 1877 during Japan's Meiji era. In May, the firm quietly ceased operations and began preparing for bankruptcy. It could no longer absorb the escalating cost of raw materials.

It is a common story across the country. In the first half of 2026, bankruptcies linked to rising prices jumped by 23.8 per cent to 556, while those caused by labour shortages rose 12.4 per cent to 227.

Smaller, domestic-focused businesses find it particularly hard to pass these rising costs on to consumers, says Harumi Taguchi, principal economist at S&P Global Market Intelligence. Without the pricing power to adjust, their sales bases simply erode.

Even some of the healthiest historic names are choosing to restructure rather than wait for the end. Kadoya Sesame Mills, a sesame oil maker founded in 1858, has decided to go private. Backed by the Japanese private equity firm Integral, the company is launching a tender offer to delist from the stock exchange, aiming to shield itself from rising costs and geopolitical volatility.

The succession crisis

For other historic firms, the problem is not money, but people. Japan's population is ageing and shrinking, leaving many elderly business owners without anyone to hand the reins to.

Bankruptcies linked to a lack of successors rose 16.9 per cent to 312 in the first half of 2026, Teikoku Databank reported.

Historically, these businesses succeeded by keeping a long-term perspective and staying within their means, says Shigeto Nagai, head of Japan economics at Oxford Economics. While they still have sound balance sheets, Nagai notes that owners are increasingly worried they can no longer foresee a future of sustained profits.

This lack of a clear future is forcing many founders to make difficult decisions. Paul Aversano of the advisory firm Alvarez & Marsal says a combination of a weak yen, corporate governance reforms, inflation, and succession challenges is pushing boards to reassess their options. For many of Japan's oldest survivors, the choices are narrowing to going private, selling the business, or closing the doors for good.