Wacoal U.S. Suffers Big Loss; Exiting Lively

Wacoal is 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. It made the announcement as it released its first half financial results.

Meanwhile the entire Wacoal division that covers the Americas suffered a substantial loss and declining sales in the six months April 1 to September 30. Sales at Wacoal International Corp. (U.S.) fell to 15,111 million yen (about $101.1 million) at current exchange rates) from 15,537 million yen (about $104.0 million) in the first half last year. And the division suffered an operating loss of 6,716 million yen (about $44.9 million) compared to a small profit of 596 million yen (about $4.0 million) in the same period last year.

The company explained that “sales from Wacoal International Corp. (U.S.) fell below the level of the corresponding period of the previous fiscal year mainly due to a significant decrease in revenue from Intimates Online. Despite strong sales from our e-commerce business due to the success of strengthened digital marketing efforts, Wacoal America, Inc.’s sales decreased as a result of sluggish sales from third-party e-commerce websites due to the continued impact of our client’s restraint in procurement in response to declining consumer confidence. As we curbed investment in sales promotions to improve profitability, the number of customers visits declined significantly at Intimates Online, resulting in a decrease in sales from Intimates Online. As described above, we have determined that it will be difficult to improve the business results of Intimates Online in the future, and have resolved to withdraw from the Lively business and to liquidate Intimates Online.”

Sales at Wacoal Europe Ltd. also fell, from 10,069 million yen to 10,055 million yen (about $67.3 million) in the same six months. However, operating profit rose for that division, from 409 million yen last year to 800 million yen (about $5.4 million) in the six months ended September 30.

The company reported that “sales from Wacoal Europe Ltd., on a local currency basis, for the current consolidated second quarter decreased as sales from our swimwear products were cut by half as compared to the corresponding period of the previous fiscal year due to the impact of a cool summer temperature in the United Kingdom, as well as the suspension of shipments due to a cyber security incident. We have already completed the recovery work from the unauthorized access and have resumed order-taking and shipping operations from early October.”

Japan-based parent company Wacoal Holdings Corp., which sells intimate apparel and other products through divisions worldwide, suffered a loss of 4,396 million yen (about $29.4 million) on sales of 95,130 million yen (about $636.5 million) in the six months ended September 30, compared to a profit of 4,300 million yen on sales of 97,506 million yen in the same period last year. The firm summed up: “Business environment surrounding our group in Japan during the current consolidated cumulative second quarter” was “extremely challenging due to sluggish sales of our medium-priced products as our customers became more budget-conscious in the face of the rising inflation. In overseas, our sales remained weak across major regions due to the impact of downward pressure on consumption in an unstable economic environment. In addition, the suspension of shipments at Wacoal Europe Ltd. due to a system failure caused by unauthorized access that occurred in mid-September also contributed to the decrease in sales.” ­—NM