Japanese retailer The Daiei Inc. yesterday announced an agreement to sell its four Hawai'i stores to an expanding Tokyo-based retailer.

The deal will change what has been a familiar Japanese-influenced retail experience for generations of local shoppers.

Daiei said it will sell its four O'ahu stores to Don Quijote Co., a discount retail chain with about 100 stores in Japan, known for selling everything from groceries to home appliances and luxury fashions.

Don Quijote and Daiei said the sale is expected to be completed Feb. 8, according to Bloomberg News. A sale price was not disclosed.

Theresa Chang, a spokeswoman for Daiei's Honolulu-based subsidiary, The Daiei (USA) Inc., said it will be business as usual for the next couple of months, but she said she was unsure how Daiei stores might change after Don Quijote takes over.

"We will continue Daiei until next year, probably until February," she said. "After that ... it's up to the new owner," she said.

Chang said she expects Daiei's roughly 1,000 employees in Hawai'i will be retained by Don Quijote, and that none of the stores — on Kaheka Street near Ala Moana Center, and in Pearl City, Waipahu and Kailua — are expected to close.

Mitsuo Takahashi, senior managing director of Don Quijote, estimated the company would spend about $8 million to upgrade Hawai'i's Daiei stores. The stores will keep the same format, possibly adding more Japanese goods, he said.

The Daiei name would be changed, but it has yet to be decided if the stores would be called Don Quijote or something else, he added.

Several regular customers outside the Kaheka Street Daiei yesterday said they hoped the new owners leave the stores' operations, merchandise and pricing alone.

They said they like Daiei's produce and Japanese goods, and hope the selection doesn't change.

Some, like Sophie Hara, a Hawai'i Kai aerobics instructor and pre-school aide teacher, said they did not want any store improvements to come at the expense of raising Daiei's low prices.

"I like it the way it is," Hara said, as she loaded $25 worth of konnyaku, shirataki and other Japanese foods into the trunk of her car yesterday. "They can renovate it a bit. But then their prices would go up. So we don't want that to happen."

Sandra Ho of 'Aina Haina called Daiei "run down. I would hope they fix it up and organize it a little better."

Ho rarely shops at Daiei and only came in yesterday to buy $60 worth of Japanese cookies and crackers to send to relatives on the Mainland.

But Ho's mother, Ethel Yamamoto, shops at the store every week. And Yamamoto doesn't want any improvements to drive up prices on her favorite produce and Japanese foods.

"I think it's fine just the way it is," Yamamoto said. "Tell them to maintain the same prices."

Jaime Chua and his parents, who live around the corner from the Kaheka Street store, spend $10 to $20 every day at the store for whatever they need that day.

Yesterday, Chua carried out two bags full of Spam musubi, ahi poke and cheese, and said his only hope for the store would be to add a can and bottle recycling center.

Like others, Harry and Keiko Nishiguchi said the only thing they want is lower prices.

"We want them to discount more," Harry said, as he loaded a $99 rice cooker into his car. "We want senior-citizen discounts and lower prices."

Don Quijote is a relatively new competitor in Japan as a large retail chain. The company was founded in 1980 as Just Co. Ltd. to sell miscellaneous goods at wholesale and retail.

But the company primarily existed as a wholesaler until 1989, when it opened its first Don Quijote store. In 1995, the company changed its name to Don Quijote, issued shares to the public a year later and began expanding.

At the end of Don Quijote's fiscal year June 30, the company had 107 stores and about 1,600 employees. The company reported earning a $65 million net profit on $2.1 billion in sales.

Don Quijote describes itself as a full-line discount store with appliances, sporting goods, fashion-related merchandise, food, drugs, electronics and other household items.

Most stores are small-scale shops in Tokyo, but the company operates larger stores as well. Average store size is about 14,000 square feet.

Don Quijote said in its most recent annual report, issued last month, that it is determined to accelerate growth. The Daiei stores in Hawai'i would be the company's first outside Japan.

Daiei opened its first Hawai'i store in 1972 at Pearlridge Center, which was its first location outside Japan. It later added bigger stores in Honolulu, Kailua, Pearl City and Waipahu, and closed the Pearlridge outlet.

Kobe-based Daiei said in a statement that it is selling the Hawai'i stores to concentrate management resources on core operations, according to Bloomberg. Daiei officials in Hawai'i have maintained that the local operation is profitable.

Chang, of Daiei USA, said that a sale had been somewhat anticipated after newspaper reports in February said Daiei was seeking a buyer for its Hawai'i stores. But there was no official word until yesterday.

Chang said employees took the news well at a meeting yesterday morning. "Our employee reaction was good ... because their job is secure," she said.

Japan's third-biggest retailer has been working to reduce crushing levels of debt over the past several years by cutting jobs, closing underperforming businesses and selling major assets such as a baseball stadium, hotels and other investments, mostly in Japan.

Bloomberg reported that Daiei USA had $155.6 million sales in its fiscal year ended in January, and that the retailer was recording a $12.5 million charge from the sale, which Bloomberg said also includes a Daiei USA wholesale unit, Oriental Seafoods Inc.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.