Improving the Wholesale Business’s Earnings Structure and Restoring Profitability

「In the homewear business, the effects of structural reforms implemented ahead of schedule emerged, and profitability improved substantially despite a slight decline in revenue. Meanwhile, in mass-retail channels, sales exceeded plan due to the growth of character brands including “Champion,” “Sanrio,” and “ちいかわ.”」

「Although the company pursued these initiatives, they were insufficient to offset lower revenue in department-store channels, and revenue declined slightly year on year. As a result, revenue from the wholesale business for the fiscal year was ¥10,839 million, down 0.8% year on year, while the operating loss was ¥224 million, compared with operating profit of ¥31 million in the previous fiscal year.」

「In the wholesale business, department-store channels were affected by external conditions, including consumers’ preference for frugality and slowing inbound demand. At the same time, the company pursued structural reforms by expanding company-led sales areas, increasing share through collaboration with other companies, and promoting the conversion of sales areas into managed spaces. As a result, revenue from the wholesale business for the interim consolidated accounting period was ¥4,804 million, down 2.5% year on year, while the operating loss was ¥368 million, compared with an operating loss of ¥204 million in the previous year.」

「As a result, revenue from the wholesale business for the interim consolidated accounting period was ¥4,925 million, up 0.6% year on year, while the operating loss was ¥204 million, compared with an operating loss of ¥155 million in the previous year.」

「In the wholesale business, legwear sales in department-store channels benefited from increased store traffic driven by inbound demand, particularly at urban stores, as well as the expansion of company-led sales areas and measures to increase floor share. In-store sales exceeded the previous year’s results for both men’s and women’s products. The company also worked to improve the product cost ratio by reviewing the production system for its core product groups, and sales and operating profit progressed in line with plan.」

「In the base-cargo business, the company focused on expanding sales in department-store channels by increasing floor share and worked to improve the return rate through appropriate inventory management. In mass-retail channels, it strengthened initiatives based on new profitability standards, developed new sales channels, and expanded distribution sales through collaboration partners. As a result, revenue from the wholesale business for the fiscal year was ¥10,883 million, compared with ¥10,644 million in the previous fiscal year, while operating profit was ¥22 million, compared with an operating loss of ¥1,116 million in the previous fiscal year.」

「In the wholesale business, legwear sales in department-store channels exceeded the previous year’s results for both men’s and women’s products, as measures including expanding company-led sales areas increased floor share. In addition to price revisions for some products and improved delivery rates, appropriate product supply in response to the prolonged hot weather contributed to a higher sell-through rate for spring/summer products. Returns and markdowns declined, improving the gross profit margin. Homewear in-store sales struggled as customer traffic declined due to weaker stay-at-home demand. In mass-retail channels, the company negotiated transaction terms in response to higher raw-material prices and procurement costs due to the weaker yen, and conducted promotional activities including a PUMA merchandise giveaway campaign and television advertising in Kyushu for “みんなのくつした,” universal-design socks that can be used with confidence. As a result, profit increased. Revenue from the wholesale business for the cumulative third quarter was ¥7,459 million, down 2.1% year on year, while the operating loss was ¥156 million, compared with an operating loss of ¥824 million in the same quarter of the previous year.」

「In the wholesale business, legwear sales in department-store channels exceeded the previous year’s results for both men’s and women’s products, as measures to increase floor share, including expanding company-led sales areas, proved effective amid an increase in store traffic. The gross profit margin also improved due to price revisions for some products, improved delivery rates, and fewer returns resulting from appropriate product supply. Homewear in-store sales struggled as demand shifted from stay-at-home demand during the COVID-19 pandemic toward demand for going out following the easing of restrictions on activities. In mass-retail channels, although higher raw-material prices and procurement costs due to the weaker yen were challenges, profit increased as the company improved distribution efficiency by scaling back its OEM business and collaborating with other companies. As a result, revenue from the wholesale business for the cumulative second quarter was ¥4,896 million, down 3.1% year on year, while the operating loss was ¥155 million, compared with an operating loss of ¥524 million in the same quarter of the previous year.」

「As a result, revenue from the wholesale business for the cumulative first quarter was ¥2,374 million, up 2.9% from the same quarter of the previous year, while the operating loss was ¥101 million, compared with an operating loss of ¥331 million in the same quarter of the previous year.」

「As a result, revenue from the wholesale business for the fiscal year was ¥10,644 million, compared with ¥11,512 million in the previous fiscal year, while the operating loss was ¥1,116 million, compared with an operating loss of ¥28 million in the previous fiscal year.」

「In mass-retail channels, the cost of sales for overseas-produced products rose sharply due to higher raw-material costs and the weaker yen, causing a significant deterioration in the gross profit margin. As a result, revenue from the wholesale business for the cumulative third quarter was ¥7,615 million, compared with ¥7,536 million in the same quarter of the previous year, while the operating loss was ¥824 million, compared with an operating loss of ¥249 million in the same quarter of the previous year.」

「However, profit declined due to the impact of returns of winter products and increased trademark royalties. In mass-retail channels, the company worked to win private-label business from major GMS operators, but the cost of goods for overseas-produced products rose sharply due to the weaker yen, causing a significant deterioration in the gross profit margin. As a result, revenue from the wholesale business for the cumulative second quarter was ¥5,055 million, compared with ¥5,174 million in the same quarter of the previous year, while the operating loss was ¥524 million, compared with an operating loss of ¥43 million in the same quarter of the previous year.」

「As a result, revenue from the wholesale business for the cumulative first quarter was ¥2,307 million, compared with ¥2,443 million in the same quarter of the previous year, while the operating loss was ¥331 million, compared with operating profit of ¥64 million in the same quarter of the previous year.」

「As a result, revenue from the wholesale business for the fiscal year was ¥11,512 million, up 15.1% year on year, while the operating loss was ¥28 million, compared with an operating loss of ¥1,668 million in the previous fiscal year.」

「As measures to strengthen sales by converting the self-operated model into shops, the wholesale business opened “N-platz by NAIGAI,” which brought together the company’s men’s items, and “HOUSE WEAR STUDIO by NAIGAI,” a lifestyle-concept shop featuring legwear and homewear. As product-enhancement measures, sales of knit shoes made using sock-knitting machines, which are easy to wash with water and carry, and versatile leggings pants combining fashion and functionality progressed steadily. As a result, revenue from the wholesale business for the cumulative third quarter was ¥7,536 million, up 10.1% year on year, while the operating loss was ¥249 million, compared with an operating loss of ¥1,265 million in the same period of the previous year.」

「In the wholesale business, department-store channels struggled as the voluntary suspension of operations continued during the COVID-19 pandemic. However, in-store sales exceeded the previous year’s results across all product categories, including legwear, underwear, and homewear, due to an increase in stores operated solely by the company and a higher share of the company’s products in the assortment. As a result, revenue from the wholesale business for the cumulative second quarter was ¥5,174 million, up 14.0% year on year, while the operating loss was ¥43 million, compared with an operating loss of ¥858 million in the same period of the previous year.」

「In the wholesale business, the legwear operation worked to expand sales of products suited to stay-at-home demand, which remained strong as time spent at home increased during the COVID-19 pandemic. Sales of knit shoes made using sock-knitting machines and room socks performed well. As a result, revenue from the wholesale business for the cumulative first quarter was ¥2,443 million, up 41.7% year on year, while operating profit was ¥64 million, compared with an operating loss of ¥539 million in the same period of the previous year.」

「As a result, revenue from the wholesale business for the fiscal year was ¥10,002 million, down 32.8% year on year, while the operating loss was ¥1,668 million, a deterioration of ¥1,577 million year on year.」

「In the wholesale business, the company continued to focus on expanding sales in department-store channels by adding stores operated solely by the company and jointly self-operated stores with fashion-accessories companies. Against strong stay-at-home demand during the COVID-19 pandemic, it also worked to strengthen sales of room socks, loungewear, pajama-style homewear, and aprons. To reduce the increased inventory of spring/summer products resulting from restrictions on business activities following the issuance of the state of emergency declaration, the company held its company sale and extended the sales period for the inventory. However, sales remained challenging compared with the previous year due to restrictions on activities, including the scaling back and cancellation of event-based sales and shortened business hours resulting from the spread of COVID-19, as well as consumers refraining from going out and weak sales of business-related products amid continued remote work. As a result, revenue from the wholesale business for the cumulative third quarter was ¥6,845 million, down 34.1% year on year, while the operating loss was ¥1,265 million, a decline of ¥1,291 million year on year.」

「As a result, revenue from the wholesale business for the cumulative second quarter was ¥4,539 million, down 37.7% year on year, while the operating loss was ¥858 million, a decline of ¥936 million year on year.」

「In the wholesale business, the company focused on expanding sales in department-store channels by expanding stores operated solely by the company and jointly self-operated stores with fashion-accessories companies. In mass-retail channels, it worked to develop new sales channels, including category-specialty chains, leveraging the distinctive features of its products. However, conditions became extremely difficult as events marking the company’s 100th anniversary and event-based sales scheduled for March were scaled back or cancelled due to the spread of COVID-19, and almost all stores were forced to suspend operations following the issuance of the state of emergency declaration. As a result, revenue from the wholesale business for the cumulative first quarter was ¥1,724 million, down 48.0% year on year, while the operating loss was ¥539 million, compared with operating profit of ¥84 million in the same period of the previous year.」

「Across the wholesale business, the company actively rolled out the initiatives described above, but these were insufficient to offset weak sales through existing distribution channels, resulting in lower revenue. As a result, revenue from the wholesale business for the fiscal year was ¥14,880 million, down 5.7% year on year, while the operating loss was ¥90 million, a deterioration of ¥451 million year on year.」

「As a result, revenue from the wholesale business for the cumulative third quarter was ¥10,393 million, down 3.6% year on year, while operating profit was ¥26 million, down 91.1% year on year.」

「As a result, revenue from the wholesale business for the cumulative second quarter was ¥7,282 million, up 3.5% year on year, while operating profit was ¥78 million, down 53.9% year on year.」

「The legwear business, the core of the wholesale business, worked to evolve its wholesale business into a consumer-led business model, while pursuing greater competitiveness and improved profitability. As a result, revenue from the wholesale business for the cumulative first quarter was ¥3,315 million, up 4.1% year on year, while operating profit was ¥86 million, down 45.3% year on year.」

「The legwear business, the core of the wholesale business, focused on initiatives to increase in-store sales while thoroughly implementing demand-linked wholesale in department-store channels, and worked to improve margins through cost reductions. In mass-retail channels, it worked to expand sales through deeper engagement with major mass-retail chains. As a result, revenue from the wholesale business for the fiscal year was ¥14,966 million, up 5.9% year on year, while operating profit was ¥355 million, down 13.1% year on year.」

「In department-store channels, the legwear business, the core of the wholesale business, focused on initiatives to increase in-store sales while thoroughly implementing demand-linked wholesale, while also working to improve margins through cost reductions. In mass-retail channels, it worked to expand sales through deeper engagement with major mass-retail chains.」

「In department-store channels, the legwear business, the core of the wholesale business, focused on initiatives to increase in-store sales while thoroughly implementing demand-linked wholesale, while also working to improve margins through cost reductions. In mass-retail channels, it worked to expand sales through deeper engagement with major mass-retail chains.」

「As a result, revenue from the wholesale business for the cumulative first quarter was ¥2,984 million, up 6.4% year on year, while operating profit was ¥139 million, up 11.9% year on year, resulting in higher revenue and operating profit.」

「The legwear business, the core of the wholesale business, worked to improve margins through cost reductions. In department-store channels, it focused on initiatives to increase in-store sales while thoroughly implementing demand-linked wholesale. In mass-retail channels, it worked to expand sales through deeper engagement with major mass-retail chains.」

「The legwear business, the core of the wholesale business, worked to improve margins through cost reductions. In department-store channels, it focused on initiatives to increase in-store sales while thoroughly implementing demand-linked wholesale, while in mass-retail channels it worked to expand sales through deeper engagement with major GMS operators.」

「The legwear business, the core of the wholesale business, continued working to improve margins through cost reductions from the previous fiscal year. In department-store channels, it focused on initiatives to increase in-store sales while thoroughly implementing demand-linked wholesale, while in mass-retail channels it worked to expand sales through deeper engagement with major GMS operators.」

「As a result, revenue from the wholesale business for the cumulative first quarter was ¥2,805 million, up 1.9% year on year, while operating profit was ¥124 million, an increase of ¥6 million year on year.」

「As a result, revenue from the wholesale business for the fiscal year was ¥13,873 million, down 3.1% from the previous fiscal year, while operating profit was ¥421 million, an increase of ¥477 million.」

「The legwear business in the wholesale segment focused on measures to increase in-store sales while rigorously aligning wholesale operations with actual demand in its department-store channel, seeking to improve profitability. In the mass-retail channel, it sought to improve margins by deepening its initiatives with major GMS operators and reducing procurement costs. As a result, wholesale-business sales for the cumulative third quarter of the current consolidated fiscal year were ¥9,547 million, down 3.9% year on year, while operating profit was ¥373 million, an increase of ¥500 million year on year.」

「The legwear business, the core of the wholesale business, focused on measures to expand in-store sales while rigorously aligning wholesale operations with actual demand in its department-store channel, seeking to improve profitability. In the mass-retail channel, it sought to expand sales by deepening its initiatives with major GMS operators and to improve margins by reducing procurement costs. As a result, wholesale-business sales for the cumulative second quarter of the current consolidated fiscal year were ¥6,365 million, down 4.5% year on year, while operating profit was ¥197 million, an increase of ¥321 million year on year.」