By YOSHIKATSU NAKAJIMA/ Staff Writer
May 16, 2020 at 15:23 JST
Many department stores remain shuttered in Tokyo and elsewhere due to the coronavirus outbreak. (Asahi Shimbun file photo)
Globally renowned apparel maker Renown Inc. has gone bust after more than a century in business, a victim of stagnant sales due to the novel coronavirus outbreak.
The company, well known for its award-winning television commercials in the 1970s featuring French actor Alain Delon, filed papers with the Tokyo District Court on May 15 seeking bankruptcy protection under the Civil Rehabilitation Law.
Renown is the first company listed in the First Section of the Tokyo Stock Exchange to file for bankruptcy this year.
It had been struggling since even before the pandemic hit, but the closure of department stores across Japan due to restrictions on people's movements, proved to be the final nail in the coffin.
About 70 percent of Renown’s sales were through its various outlets located in department stores. Company officials said the total debts came to about 13.8 billion yen ($129 million).
At one time, Renown was the largest apparel manufacturer in Japan, and in the fiscal year ending in December 1990 it racked up sales of 231.7 billion yen. But its performance plummeted with the collapse of the asset-inflated economy in the early '90s.
In 2010, Renown sold a major stake to Chinese textile giant Shangdong Ruyi Science and Technology Group and embarked on rebuilding its brand image under the Chinese company umbrella.
However, sales for the fiscal year ending in December 2019 came to 50.2 billion yen, handing Renown a 6.7 billion yen net loss, the second straight year it ended up in the red.
The coronavirus outbreak led to drastic reductions in sales for Renown as major department stores closed in response to requests from prefectural governors to prevent a further spread of COVID-19 infections.
As a result, sales at Renown outlets in March dropped by 40 percent year on year and by 80 percent in April.
Renown sources said that by mid-May, the company did not have sufficient financial resources to pay its business partners.
As of the end of 2019, the Renown group employed 905 people.
Other apparel manufacturers, both in Japan and overseas, are in a similar predicament because of the coronavirus outbreak.
J. Crew Group filed for bankruptcy protection in the United States in early May.
Sanyo Shokai Ltd., which lost its license to manufacture and sell Burberry products in Japan, recorded its fourth straight year of net losses for the fiscal year that ended in February.
Onward Holdings Co. is also considering a drastic cut in the number of its domestic outlets.
Both Japanese companies still depend on outlets in department stores for a large share of their sales.
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