Wacoal U.S.: Operating Loss Of $8.6 Million

Wacoal International Corp., the U.S. division of the Japan based firm, reported an operating loss of 914 million yen (about $8.6 million) on lower sales of 17,649 million yen (about $162 million at today’s exchange rates) for the year ended March 31, 2021.

The year before, the segment reported a profit of 401 million yen (about $3.7 million) on sales of 19,194 million yen (about $176 million).

The company explained that sales “on a local currency basis decreased by 5.7% (a decrease of 8.0% on a Japanese yen basis) as compared to such sales for the previous fiscal year. Although there was a positive impact of the inclusion of sales from Intimates Online [which is the segment that sells the company’s Lively brand] on our sales for the first half of the current fiscal year, revenue decreased by 15.4% as compared to such revenue for the corresponding period of the previous fiscal year due to the weak sales from Wacoal America Inc., which distributes “Wacoal” and “b.tempt’d” brand products at physical stores (department stores), resulting from the impact of the pandemic. On the other hand, revenue for the second half of the current fiscal year increased by 5.4% as compared to such revenue for the corresponding period of the previous fiscal year as a result of strong sales from Intimates Online, which maintained a high purchase rate and average spending per customer, as well as high growth in sales achieved from our e-commerce website and third-party e-commerce websites, which offset declines in sales from physical stores.”

The company continued that, in the U.S., “during the current consolidated fourth quarter, Intimates Online commenced transactions with Target Corporation, a major retailer in the United States, and is distributing Lively brand products through e-commerce channels and physical stores.”

“We recorded an operating loss of $8.6 million on a local currency basis (0.91 billion yen on a Japanese yen basis)” the company noted, “due to our continued strategic growth investments in our Lively brand distributed by Intimates Online, as well as the impact of the decreased revenue, despite our efforts to reduce costs and use of government assistance.”

For Wacoal Holdings Corp. as a whole, which operates in countries around the world, sales fell 18.5% to 152,204 million yen (about $1.39 billion), as the company posted a profit of 7,025 millon yen (about $64 million). Last year sales were 186,760 million yen (about $1.71 billion), with a profit of 3,472 million yen (about $32 million).

Wacoal’s European segment reported operating income of 666 million yen (about $6 million) on sales of 9,896 million yen (about $91 million). The company explained that sales at the division “on a local currency basis decreased by 24.0% (a decrease of 23.8% on a Japanese yen basis) as compared to such sales for the previous fiscal year. Sales for the first half of the current fiscal year decreased by 33.6% as compared to such sales for the corresponding period of the previous fiscal year due to the significant impact of the lockdown measures implemented in the United Kingdom and major countries in Europe. While signs of recovery were visible during the Christmas sale season, sales for the second half of the current fiscal year decreased by 12.6% as compared to such sales for the corresponding period of the previous fiscal year due to additional lockdown measures implemented during the current consolidated fourth quarter, which impacted our business operations. Sales from our e-commerce business, which we launched in the previous fiscal year, exceeded our plan, and now accounts for 5.4% of sales from Wacoal Europe for the current fiscal year. Although operating income on a local currency basis significantly decreased by 34.2% (a decrease of 33.9% 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 (excluding the impairment charges of 2.67 billion yen on goodwill with respect to Wacoal Europe).”— NM