(Filed Under wholesale Lingerie News). Six month sales at Wacoal International Corp., the division that covers all of the Americas, fell 16.8% to 8,511 million Japanese yen (about $82 million at current exchange rates) as the division posted an operating loss of 915 million Japanese yen (about $8.8 million).
Wacoal noted the operating loss came “as we continued to make strategic growth investments in our Lively brand distributed by Intimates Online, as well as the impact of the decreased revenue.” Sales for Lively in the six months ended September 30, 2020 were “$17.8 million dollars (1.91 billion yen on a Japanese yen basis) as a result of the positive impact of an increase in the number of new customers attained as we were successful in investing in advertising mainly via SNS,” (online advertising).
The company added that “the e-commerce business of Wacoal America Inc., which distributes “Wacoal” and “b.tempt’d” brand products, maintained a high growth rate in sales, achieving an increase of 62.3% from such sales for the corresponding period of the previous fiscal year. Sales from third-party e-commerce websites were also strong. Sales from physical stores (department stores), however, were weak due to the impact of our clients’ expense control over purchases following deterioration in their financial position, in addition to the temporary closings following the implementation of lock down measures at major cities.”
In response to a question from BODY, Mitch Kauffman, Wacoal America president and CEO, explained, “we currently do business in Canada, Mexico, Brazil and assorted Caribbean countries."
In the first half, (which ran from April 1, 2020 to September 30, 2020), Japan-based Wacoal as a whole, with worldwide operations that include Europe and Asia, reported net income of 1,782 million yen (about $17.2 million) on sales of 73,155 million yen (about $705 million).
In the same period last year Wacoal had net income of 6,668 million yen (about $64.3 million) on sales of 101,450 million yen (about $ 979 million).
Operating income at Wacoal Europe Ltd. fell 79.2% to 139 million yen (about $1.3 million) on sales, which fell 34.2%, to 4,598 million yen (about $44.4 million).
Wacoal Europe, which sells to a variety of countries, explained that “during the current consolidated cumulative second quarter, sales in the United Kingdom, Europe and North America decreased by 44.6%, 28.0% and 28.4%, respectively. Sales from our e-commerce business, which we launched in the previous fiscal year, exceeded the plan and the share of e-commerce sales as to sales of the Wacoal Europe increased to 5.8%. Although operating income on a local currency basis significantly decreased by 79.1% (a decrease of 79.2% on a Japanese yen basis) due to the impact of decreased revenue, we were able to record profit as a result of our efforts to reduce costs by using government assistance.”
Looking ahead at the full fiscal year (which ends March 31, 2021), Wacoal announced it is projecting sales of 156,000 million yen (about $1.50 billion) for the entire company, and a net loss of 500 million yen (about $4.8 million). Last summer Wacoal had projected a greater annual loss of 3,700 million yen (about $35.7 million) on sales of 158,000 million yen (about $1.52 billion).
The firm explained the “variances,” stating “we recorded increases from our previous forecast (announced on July 30, 2020) in net sales, operating income, pre-tax net income, and net income attributable to Wacoal Holdings Corp. shareholders for the current consolidated cumulative second quarter, as a result of our efforts to reduce costs at our operating companies and inclusion of valuation gain on marketable securities and investments, as well as our e-commerce business which maintained high growth.” It concluded that “the business environment surrounding our group continues to remain uncertain as the number of coronavirus infections is increasing overseas, and there is concern for another wave of infection in Japan.” — NM
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