Wacoal U.S. Segment: $47M Operating Loss

In the nine months ending December 31, 2023, Wacoal International Corp. (U.S.), the Americas segment of the Japanese lingerie firm, suffered an operating loss of 6,981 million yen (about $47 million at the current exchange rate) on revenue of 21,302 million yen (about $142 million). In the same period last year the division had suffered an even greater operating loss of 9,587 million yen (about $64 million) on slightly greater revenue of 21,491 million yen.

During the same nine months, Wacoal Europe Ltd. reported an operating profit of 957 million yen (about $6.4 million) on revenue of 14,504 million yen (about $97 million), compared to an operating profit of 955 million yen on revenue of 14,013 million yen in the same period the year before.

Parent company Wacoal Holdings Corporation, which has several other segments worldwide, in the nine months April 1, 2023 through December 31, 2023, lost 3,950 million yen (about $26 million), on total revenue of 141,407 million yen (about $943 million), compared to a loss in the same period last year of 2,226 million yen on revenue of 143,903 million yen.

In the U.S., Wacoal pointed to “the negative impacts of the suspension of shipments due to a cybersecurity incidence in September 2023 and decreased sales of our swimwear products caused by the cool summer,” and noted that “sales for the current consolidated cumulative third quarter declined on local currency basis.” It continued that “sales from Wacoal International Corp. (U.S.) fell below the level of the corresponding period of the previous fiscal year due to a significant decrease in revenue from Intimates Online, which distributes the “Lively” brand, despite strong sales from Wacoal America, Inc. (“Wacoal America”), which distributes “Wacoal” brand. During the current third quarter, Wacoal America showed improvement in sales from retail stores and third-party e-commerce websites as its own e-commerce business showed strong sales and its main customers eased their restraint on procurement in response to a recovery in consumer spending. On the other hand, sales from Intimates Online fell short of our expectations despite our efforts to sell down inventory following our decision to withdraw from the business by conducting discount promotions since November 2023.”

The Tokyo-based firm added that “sales from Wacoal Europe Ltd. remained weak from October 2023 in the United Kingdom and the Europe, its main markets, due to the impact of declining consumer confidence resulting from the sustained inflation and high interest rates.”

Late last year Wacoal announced it was planning to “withdraw from the Lively business and to liquidate Intimates Online,” the parent company of that brand, after many years of losses and declining sales.

Now, as the company announce the nine month results it explained: “We recorded an operating loss of 5.35 billion yen [about $36 million] (as compared to an operating loss of 8.04 billion yen [about $54 million] for the corresponding period of the previous fiscal year) mainly due to the impact of the recording of impairment charge of 7.40 billion yen [about $49 million] on goodwill related to the business withdrawal and liquidation of Intimates Online at Wacoal International Corp. (U.S.).” — NM