(Filed Under Financial and General Interest News). Although Wacoal sales in the U.S. “remained unchanged from the previous fiscal year,” for the company as a whole they decreased 7.0% worldwide. Meanwhile the Japan-based firm’s net income for the 12 months ended March 31, 2017 rose 1.2%.
Wacoal does not reveal exact sales figures for the U.S. But it did report that combined sales for Europe and North America dropped sharply in its latest fiscal year to 29,633 million yen (about $271 million at today’s exchange rates) from 34,338 million yen (about $314 million) in the fiscal year ended March 31, 2016.
As a whole, the international intimates and apparel company earned 12,648 million yen (about $115 million) on sales of 195,881 million yen (about $1.788 billion) compared to 11,472 million yen (about $105 million) on sales of 202,917 million yen (about $1.852 billion) for the fiscal year ended March 31, 2016.
“With respect to Wacoal America, Inc., deparment-store sales on a local currency basis were weak due to the shifting focus in the retail environment in the United States from physical store sales to e-commerce sales, a trend that has become more prominent,” the company reported. “On the other hand, overall sales on a local currency basis remained unchanged from the previous fiscal year, as sales from our own e-commerce website increased significantly and sales of our products through e-commerce websites managed by department stores and other companies grew substantially.”
“The gross profit rate improved because discounts were decreased by our pricing policy and also due to a higher ratio of e-commerce sales. However, operating income on a local currency basis fell below the operating income for the previous fiscal year due to increases of expenses associated with strengthening of e-commerce sales, increases of labor costs in healthcare costs as a result of increases in medical insurance premiums, and impact of expenses from closure of our directly managed outlet stores that were underperforming”
“With respect to sales on a local currency basis for Wacoal Europe, sales at department stores in the United Kingdom were steady and e-commerce sales in the North America were strong.” The Wacoal Europe division included such brands as Elomi, Fantasie, Freya, Leia and Goddess when it came to the parent company when it acquired Eveden Group in 2012.
The company also reported that “sales from our plus-size brand “Elomi” greatly exceeded sales for the previous fiscal year in various countries including Europe, North America and Australia. Although sales were significantly and negatively impacted by the “Huit” brand, which business was liquidated, overall sales exceeded the overall sales for the previous fiscal year due to the currency appreciation in non-British Pound markets. In terms of operating income on a local currency basis, although gross profit increased due to increased sales, our overall operating income largely fell below the operating income for the previous fiscal year due to the impact of expenses related to the liquidation proceedings for our French subsidiary and increased expenses under IT-related investments.”
Looking at its fiscal year, which began April 1, 2017, the company explained, “Because the domestic [Japanese] economy is anticipated to make only a mild recovery due to improvement in the employment environment, the management environment surrounding our group will remain difficult, as consumers will very likely continue to be budget-conscious and a number of large-scale retail stores will withdraw from the market. Also, as our overseas business might be affected by the trade and financial policies to be adopted by the new government of the United States, political situations in European countries, as well as economic circumstances in China and other Asian countries, the prospects for our overseas business will remain uncertain.”
“In our overseas business, we are planning to pursue business collaboration between Europe and the United States and to establish system infrastructure that enables sharing of information on product planning and production management, aiming for the development of highly competitive products and decreases in procurement lead time.”
Wacoal forecasted net sales for the current fiscal year of “200,000 million yen (an increase of 2.1% as compared to the previous fiscal year)” as well as “net income attributable to Wacoal Holdings Corp.: 9,000 million yen (a decrease of 28.1% as compared to the previous fiscal year).” — NM
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