Slowing growth in the Chinese market and rising labor costs
First written in FY2017. 10 of 26 entries say "Mitigated", first in FY2021-Q3. Latest entry: FY2026.
Baroque Japan Limited moved to the "Worse" side of this theme in 2018, 1 year before the typical company in this theme (2019).
The whole theme swung hardest in 2020: 141 of 158 companies on the "Worse" side.
3 other companies' latest entry also says "Mitigated".
- FY2026MitigatedAnnual report
「In China, we sold the joint venture with Belle last fiscal year and moved to a risk-off position, transitioning the business to stable royalty income.」
In response to the risks of slowing growth and weak consumption in the Chinese market, the sale of the Chinese joint venture and the transition from store operations to royalty income reduced direct market exposure. - 2026-04-14MitigatedEarnings
「In China, we sold the joint venture with Belle last fiscal year and moved to a risk-off position, transitioning the business to stable royalty income.」
After selling the China joint venture, the business model was described as having shifted from store operations to stable royalty income. - FY2026-H1MitigatedAnnual report
「We dissolved the China joint venture and transferred the shares in the Chinese wholesale and retail companies.」
In response to the risks to the China joint venture arising from China's economic slowdown and weak personal consumption, the transfer of shares in the wholesale and retail companies reduced our direct exposure to operating stores and joint ventures in China. - FY2025WorsenedAnnual report
「The economic environment is characterised by weaker personal consumption due to the deterioration in employment conditions, the property downturn, growing anxiety about the future and other factors associated with China's economic slowdown.」
The ongoing slowdown in personal consumption caused by China's economic slowdown, the property downturn, deteriorating employment conditions and anxiety about the future led to an increase in the equity-method investment loss from the Chinese retail company to ¥2.43 billion. - FY2025-H1MaterialisedAnnual report
「The impact of weaker personal consumption in China and an increase in inventory valuation losses resulted in lower revenue and profit.」
Weaker personal consumption in China, together with an increase in inventory valuation losses, was reflected in lower revenue and profit at the Chinese joint venture. - FY2025-Q1WorsenedAnnual report
「In light of China's economic growth reaching a pause, we will shift our strategy from "revenue growth" to "pursuing profit."」
The slowdown in China's economic growth was explicitly identified as the reason for changing the business strategy, indicating the need to prioritise the pursuit of profit over revenue growth. An increase in inventory valuation losses and declines in revenue and profit in the China business were also reported. - FY2024WorsenedAnnual report
「In addition, China's personal consumption remains lacklustre, affected by the worsening property downturn, increasingly difficult employment conditions and other factors.」
While the China joint venture recovered to higher revenue and profit, personal consumption in China was described as lacklustre against a backdrop of the property downturn and deteriorating employment conditions, again highlighting macroeconomic risks. - FY2024-Q2MitigatedAnnual report
「The China joint venture with our strategic business partner Belle International Holdings Limited (hereinafter, "Belle") recorded increases in revenue and profit compared with the previous fiscal year as sales conditions recovered.」
As sales conditions in China recovered, the China joint venture recorded year-on-year increases in revenue and profit, mitigating the impact of China-related market risks that had become apparent through the previous fiscal year. - FY2024-Q1MitigatedAnnual report
「With the end of China's zero-COVID policy, economic activity in China began to recover, and the China business recorded year-on-year increases in revenue and profit.」
Following the end of China's zero-COVID policy and the recovery in economic activity, the China business recorded year-on-year increases in revenue and profit, mitigating the impact on performance of the Chinese market risks that had become apparent through the previous fiscal year. - FY2023WorsenedAnnual report
「In addition to store closures and other effects associated with the Shanghai lockdown, movement restrictions continued to occur intermittently across China even after the lockdown was lifted, resulting in a significant impact from the spread of COVID-19 in China. Store closures resulting from commercial facility closures and weaker consumer sentiment had a significant impact on the China business. Although we strengthened e-commerce initiatives, including livestream commerce through e-commerce channels such as TikTok, the China business recorded substantial year-on-year declines in revenue and profit.」
Risks in the Chinese market materialised as substantial declines in revenue and profit in the China business through store closures, movement restrictions and weaker consumer sentiment. - FY2023-Q3WorsenedAnnual report
「The China joint venture with strategic business partner Belle International Holdings Limited was heavily affected by the spread of COVID-19 in China, including store closures and other consequences of the Shanghai lockdown, as well as intermittent movement restrictions in various parts of China even after the lockdown was lifted. Store closures following the closure of commercial facilities and weaker consumer sentiment had a significant impact on the China business. Although the company strengthened e-commerce initiatives, including live commerce through e-commerce channels such as TikTok, the China business reported substantial year-on-year decreases in both sales and profit. As a result, the company recorded an equity-method investment loss of ¥728 million from the China joint venture.」
In the Chinese market, the continued spread of infectious diseases, store closures, movement restrictions and weaker consumer sentiment had an increasing impact, resulting in lower revenue and profit at the Chinese joint venture and an investment loss of ¥728 million. - FY2023-Q2MaterialisedAnnual report
「COVID-19 resurged in some regions of China in June and affected results by dampening consumer sentiment. Although e-commerce sales increased substantially, sales at the retail company, an equity-method affiliate, and the wholesale company, a consolidated subsidiary, declined year on year.」
The resurgence of COVID-19 and weaker consumer sentiment in China actually emerged as a decline in sales at the joint venture's retail and wholesale companies. - FY2023-Q1MaterialisedAnnual report
「The China joint venture with strategic business partner Belle International Holdings Limited was affected by movement restrictions and other measures accompanying the spread of COVID-19 in China. Although it focused on e-commerce sales and expanded its channels to TikTok and other platforms, the China business reported year-on-year decreases in both sales and profit.」
Movement restrictions associated with China's zero-COVID policy actually affected the Chinese joint venture, resulting in year-on-year declines in revenue and profit in the China business despite measures to expand the e-commerce channel. - FY2022MitigatedAnnual report
「The China joint venture with strategic business partner Belle International Holdings Limited performed strongly in the first half. Although the second half was affected by movement restrictions and other measures accompanying the spread of COVID-19 in China since the previous autumn, e-commerce growth helped the China business achieve substantial year-on-year increases in both sales and profit.」
Although the spread of COVID-19 and movement restrictions continued in China, growth in e-commerce led to a substantial year-on-year increase in revenue and profit in the China business, easing the impact on results of the Chinese market risk that had emerged in the previous fiscal year. - FY2022-Q3MitigatedAnnual report
「Regarding the Chinese joint venture with strategic business partner Belle International Holdings Limited (Belle), the China business remained firm, supported by growth in e-commerce, despite the spread of COVID-19 in some regions.」
Although the spread of COVID-19 continued in some regions, growth in e-commerce kept the China business firm, and the impact of China market-related risks on results was described as having eased from the previous quarter. - FY2022-Q2RestatedAnnual report
「As personal consumption in China continued to remain firm, sales at the retail company, an equity-method affiliate, and the wholesale company, a consolidated subsidiary, increased year on year.」
Firm personal consumption in China and year-on-year increases in retail and wholesale sales at the Chinese joint venture continued. - FY2022-Q1MitigatedAnnual report
「Personal consumption in China remained firm, and sales at the retail company, an equity-method affiliate, and the wholesale company, a consolidated subsidiary, increased year on year.」
In the Chinese market, personal consumption remained firm, and sales at the retail and wholesale companies of the Chinese joint venture increased year on year. - FY2021MitigatedAnnual report
「China's market recovered quickly, and from May onward, sales at the retail company, an equity-method affiliate, and the wholesale company, a consolidated subsidiary, showed signs of recovery in line with the recovery in personal consumption in China.」
Regarding the Chinese market risk that had emerged since the previous fiscal year due to the spread of COVID-19, retail and wholesale sales began to recover as the market and personal consumption recovered. - FY2021-Q3MitigatedAnnual report
「As the spread of COVID-19 in China came under some control and personal consumption began to recover, sales at the retail company, an equity-method affiliate, and the wholesale company, a consolidated subsidiary, showed signs of recovery.」
In the Chinese market, the spread of COVID-19 came under some control, and personal consumption and sales at the Chinese joint venture showed signs of recovery. - FY2021-Q2MaterialisedAnnual report
「COVID-19 resurged in some regions of China in June and affected results by dampening consumer sentiment. Although e-commerce sales increased substantially, sales at the retail company, an equity-method affiliate, and the wholesale company, a consolidated subsidiary, declined year on year.」
The resurgence of COVID-19 and weaker consumer sentiment in the Chinese market actually emerged as a decline in sales at the retail and wholesale companies. - FY2021-Q1MaterialisedAnnual report
「Physical store closures in January and February due to COVID-19 affected results. Although nearly all stores had resumed operations by the end of March, sales at the retail company, an equity-method affiliate, and the wholesale company, a consolidated subsidiary, declined year on year.」
The spread of COVID-19 and physical store closures in the Chinese market actually emerged as a decline in sales at the retail and wholesale companies of the Chinese joint venture. - FY2020RestatedAnnual report
「Overseas, various uncertainties remain, including tensions over US-China trade issues and the UK's withdrawal from the EU. In addition, the global spread of COVID-19 has increased uncertainty throughout the global economy.」
Uncertainty in overseas economies, including China, continues to be disclosed alongside US-China trade issues, the UK's withdrawal from the EU, and COVID-19. - FY2020-Q3RestatedAnnual report
「Overseas, various uncertainties remain, including tensions over trade issues, the outlook for China's economy, and the course of the UK's withdrawal from the EU, requiring continued close monitoring.」
Uncertainty over the outlook for China's economy continues to be cited as an overseas concern alongside trade issues and the UK's withdrawal from the EU. - FY2019-Q3MaterialisedAnnual report
「Retail sales continued to grow despite the impact of the deterioration in China's economy.」
Regarding the slowdown in the Chinese market, previously recognized as a risk, it was disclosed that the deterioration in China's economy actually affected retail sales at the Chinese joint venture. - FY2018SoftenedAnnual report
「Concerns over rising labor costs in China and higher import procurement prices due to yen depreciation, among other factors」
The previous reference to slower growth in the Chinese market was not found, and the focus has shifted to the risks of higher labor costs and procurement prices. - FY2017First statedAnnual report
「In China, market growth is slowing and labor costs are rising.」
Alongside the policy of expanding the Chinese joint venture, slower growth in the Chinese market and rising labor costs are recognized as threats.