The business performance of major Japanese store chains selling business and casual wear worsened in the fiscal year ending in March 2020.
All of the major store chains reported declines in consolidated net sales, and their operating profits decreased sharply. While the suits market continued to shrink as business wear became more casual and the coronavirus pandemic forced the stores to temporarily close or shorten their business hours.
Although the establishment of Cool Biz wear has an impact on their business, the trend toward casual business wear was more prominent in 2019 with the emergence of easy-to-care setup suits. The coronavirus can be said to have made matters worse, and the number of customers dropped between late February and March, a period when sales are said to reach the highest during the year.
Aoyama Trading Co., Ltd. reported that its fiscal net sales declined by 13.0% compared to the previous fiscal year, with operating profits falling 90.2%. Its core Business Wear segment suffered a 16.9% decrease in sales to 153,083 million yen and a 97.7% drop in segment profits to 314 million yen, due to weak demand during February and March, a busy period for ceremonial wear, such as garments worn at graduations, ceremonies for corporate and school entrances, etc. Sales of men’s suits decreased by 440,000 units to 1.6 million units. The unit price declined by 99 yen to 27,088 yen.
Aoki Holdings Inc. reported a 7.6% decrease in net sales, but its operating profits fell about 50%. As a result of changes in business style, weather factors such as the warm winter, consumption tax hikes and the coronavirus, its Fashion Business segment posted a 14.0% sales decline to 98,351 million yen, and a 60.3% drop in segment profits to 2,886 million yen. The coronavirus also had an impact on its Anniversaire and Bridal business.
Haruyama Holdings Inc. also suffered a decline in net sales and a drop in operating profits, but the company succeed in turning the net losses made in the previous fiscal year to net profits. Although sales of fall/winter wear were sluggish due to the warm winter and consumption tax hikes, sales of health-related products remained strong. Same-store sales in March dropped 24.4% due to the coronavirus.
The chain stores did not reveal their business outlook for the current fiscal year, as it is difficult to reasonably estimate it due to the coronavirus. Sales continued to drop drastically in April, but a number of the stores are seeing sales growing at official online shops. Some say online sales are up 1.5 to 1.8 times, and this might hold the key for an offensive to turn sales upward.
Konaka Co., Ltd. reported a 14.9% decrease in net sales during the first half of the current fiscal year (October 2019 to March 2020), with operating profits falling 95.3%. Net losses were also reported. Business was affected by the increase in consumption taxes, the impacts of large typhoons on store operations last fall and sluggish sales of cold weather garments due to the warm winter, and the coronavirus caused a drastic decrease in the number of customers and sales.
(See Statistics section for fiscal business figures.)