(Filed Under wholesale Lingerie News). Sales at Lively, the lingerie brand acquired by Wacoal in 2019, dropped to $29.8 million in the year ended March 31, 2023, compared to $39.3 million the year before.
That information, reported by the firm in U.S. dollars, was contained in a “data book” released by Japan-based parent company Wacoal Holdings Corp. as it announced its annual results.
Sales at Wacoal International Corp. (U.S.), the Wacoal’s division for the Americas, which includes Lively, rose to 28,014 million yen (about $204 million if calculated at current exchange rates) for the 12 months, compared to 25,282 million yen (about $184 million) for the year ended March 31, 2022. However the segment reported an operating loss of 9,448 million yen (about $69 million) compared to an operating profit of 490 million yen the year before. Much of the loss is attributable to the fact that the division was forced, in its third quarter, to record an impairment charge of “10.11 billion yen” (about $76 million) relating to the declining value of the Lively brand.
In 2019 Wacoal’s U.S. division acquired Intimates Online, the company that contains Lively, for an initial payment of $85 million, with a commitment to make additional payments to the sellers which were to range between $20 million and $55 million in total, based on performance over the next four years. The exact amounts were to be “based on Intimates Online’s business results such as net sales,” with Wacoal noting at the time that “the introduction of earn-out consideration will reduce our risk associated with this acquisition.” Lively, which launched in 2015, and was losing money when it was acquired, continued to lose money under Wacoal.
Wacoal revealed that “in light of the recent deterioration in the marketing environment,” the Lively division “reformed its management structure in August and made efforts to improve profitability. However, as a result of significant reduction in advertising expenses, the number of customers visiting its stores fell, and as a result, sales significantly decreased.”
Wacoal summarized its overall results here: “Our business environment in the United States remained weak due to the slowdown in consumer spending as well as the impact of suppliers’ restraint on purchasing.”
“With respect to Wacoal Europe Ltd., sales from swimwear products remained strong, and our products under “Elomi” brand achieved a high level of growth against the backdrop of the growing body-positive trend. In response, sales from department stores, specialty stores and e-commerce remained strong, maintaining the growth trend.”
The company continued that sales from Wacoal China “significantly decreased due to the weak e-commerce sales as well as the temporary closings of commercial facilities and a decrease in the number of customers visiting stores, resulting from the impact of strict restrictions on activities under the zero-covid policy.”
Overall the parent company, Wacoal Holdings Corp., which has a large business in Japan, lost 1,734 million yen (about $13 million at current exchange rates) on sales of 188,592 million yen (about $1.38 billion) in the year ended March 31,2023, compared to profit of 1,585 million yen (about $12 million) on sales of 172,072 million yen (about $1.23 billion) in the previous year. — NM
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