Procurement risk from production in China and other Asian countries, rising labor costs and foreign exchange
First written in FY2017. 6 of 18 entries say "Restated". Latest entry: 2026-10-15.
Baroque Japan Limited moved to the "Worse" side of this theme in 2024, 2 years after the typical company in this theme (2022).
The whole theme swung hardest in 2022: 6 of 7 companies on the "Worse" side.
3 other companies' latest entry also says "Worsened".
- FY2027-H1MaterialisedAnnual report
「Including constraints on production activity caused by surging crude oil prices due to turmoil in the Middle East and shortages of crude oil-derived raw materials」
Risks related to procurement, foreign exchange and production locations that had previously been recognized materialized as surging crude oil prices and shortages of crude oil-derived raw materials constrained production activity. - 2026-07-15MaterialisedEarnings
「Gross profit fell below the prior-year period because inventory was cleared at shopping-center brands and costs increased across the supply chain.」
The increase in costs across the supply chain was reflected in the results as a decline in gross profit. - FY2025MaterialisedAnnual report
「Although we promoted sales focused on efficient conversion into cash and sought to dispose of inventory systematically through secondary sales channels and other measures, we were unable to fully absorb the increase in procurement costs. Gross profit from the domestic business for the current consolidated fiscal year was 95.8% of the prior-year level, below the previous year.」
Higher procurement costs actually reduced gross profit from the domestic business and could not be absorbed even through the use of secondary sales channels and systematic inventory disposal. - FY2025-H1MaterialisedAnnual report
「In addition, higher procurement cost ratios, sluggish growth in sale revenue, and an expansion in inventory valuation losses affected gross profit.」
It was disclosed that higher procurement cost ratios, together with an expansion in inventory valuation losses and other factors, actually affected gross profit. - FY2024RestatedAnnual report
「As a response, our group is working to establish a stable product supply system capable of responding flexibly to changes in global conditions by diversifying production bases across multiple countries. In response to foreign exchange movements, we will also consider appropriate foreign exchange hedging measures to mitigate risk.」
Measures to reduce procurement risk by diversifying production bases across multiple countries and using foreign exchange hedges continue to be disclosed. The notes to the financial instruments also disclosed foreign exchange forward contracts held long in US dollars. - FY2024-Q2Forward foreign-exchange transactions implementedAnnual report
「Type of underlying item | Type of transaction | Contract amount, etc. (¥ million) | Fair value (¥ million) | Valuation gain (loss) (¥ million) | Currency | Foreign exchange forward contracts | Long position | 1,117 | 1,142 | 24」
Although there were no applicable transactions at the end of the previous consolidated fiscal year, foreign exchange forward contracts with a contract amount of ¥1,117 million, held long, were disclosed at the end of the current quarter. The previously stated policy of considering foreign exchange hedges was presented as an actual transaction. - FY2024-Q1RestatedAnnual report
「Meanwhile, an uncertain business environment continues, including surging raw material prices and transportation costs and foreign exchange movements.」
Continued uncertainty in procurement and cost conditions due to raw material prices, transportation costs, and foreign exchange movements is disclosed. - FY2023MitigatedAnnual report
「As a response, our group is working to establish a stable product supply system capable of responding flexibly to changes in global conditions by diversifying production bases across multiple countries. In response to foreign exchange movements, we will also consider appropriate foreign exchange hedging measures to mitigate risk.」
Diversifying production bases across multiple countries and considering foreign exchange hedging were presented as specific responses to procurement risks related to production in Asia and foreign exchange. - FY2023-Q3MaterialisedAnnual report
「In addition, although surging raw material prices and the rapid depreciation of the yen affected costs,」
Regarding the procurement risks associated with raw material prices and foreign exchange, which had been identified previously, it was disclosed that surging raw material prices and the rapid depreciation of the yen actually affected costs. - FY2023-Q2RestatedAnnual report
「The Japanese economy during the first six months of the current consolidated fiscal year remained in an uncertain operating environment because of the spread of the seventh wave of COVID-19, soaring raw-material and energy prices, and concerns about foreign-exchange trends associated with the rapid depreciation of the yen.」
Concerns over procurement and foreign exchange conditions arising from surging raw material and energy prices and the rapid depreciation of the yen continue to be expressed. - FY2023-Q1WorsenedAnnual report
「At the same time, the impact of soaring raw-material prices and transportation costs, the rapid depreciation of the yen and restrictions on activity associated with China’s zero-COVID policy was significant, and the business environment remained uncertain.」
Regarding procurement and cost conditions, surging raw material prices and transportation costs, together with the rapid depreciation of the yen, were explicitly noted, underscoring the previously identified foreign exchange and production-location risks. - FY2021RestatedAnnual report
「Our group outsources production of its products to garment manufacturers and other suppliers in Asian countries, primarily China. Political conditions and economic conditions in the countries of production, sharp foreign exchange movements, war or terrorism, natural disasters, and other events may affect our group's procurement and, consequently, our group's results. As a response, we will consider efforts to diversify production bases across multiple countries.」
Procurement risks related to production in China and Asia, foreign exchange, and political and economic conditions continue to be disclosed, with diversification of production bases across multiple countries presented as a response. - FY2020RestatedAnnual report
「Our group outsources production of its products to garment manufacturers and other suppliers in Asian countries, primarily China. Political conditions and economic conditions in the countries of production, sharp foreign exchange movements, war or terrorism, natural disasters, and other events may affect our group's procurement and, consequently, our group's results.」
The procurement risks associated with dependence on production in China and Asia, political and economic conditions, foreign exchange, war and terrorism, and natural disasters continue to be explicitly disclosed. - FY2020-Q3MaterialisedAnnual report
「Despite the impact of yuan depreciation, the profit of the wholesale company included in the consolidated accounts as a consolidated subsidiary increased substantially.」
Regarding the foreign exchange risk previously identified, it was specifically disclosed that yuan depreciation actually affected the wholesale company's profit in the Chinese joint venture. - FY2018RestatedAnnual report
「Difficult conditions are expected to continue in procurement, including concerns over rising labor costs in China, a major apparel production base, and higher import procurement prices due to yen depreciation.」
Rising labor costs in China and concerns over higher import procurement prices due to yen depreciation continue to be cited as procurement risks. - FY2017First statedAnnual report
「The industry environment also remains challenging, including concerns over rising labor costs in China, a major apparel production base, and fluctuations in procurement prices due to foreign exchange movements.」
Political, economic, and natural-disaster risks at production contractors, primarily in China, as well as procurement price fluctuations due to labor costs and foreign exchange, were disclosed.