Renown to target youth with new low-price clothing brand
Japanese apparel maker looks to boost online, overseas sales
TOKYO -- Japan's Renown will next spring launch a brand of affordable clothing in an effort to cultivate a younger customer base and bounce back from struggling department store sales.
The apparel maker will release a rough outline of the brand as early as Friday. The clothes will target men and women in their 20s and 30s. The company's mainstay brands, such as D'urban and Ensuite, target older demographics.
The clothes will likely have price levels on a par with those sold by Zara, Fast Retailing's Uniqlo and similar competitors. They will first be sold domestically at shopping centers and online. Renown is developing the line into a core brand with a goal of 5 billion yen ($45.7 million) in annual sales, but the brand name, concepts and other details have not been finalized yet.
The brand will be global with a heavy focus on China, home of textile conglomerate and parent company Shandong Ruyi Technology Group. Shandong Ruyi will assist in procuring materials, in addition to helping with expansion to the mainland.
The Chinese company took a stake in Renown in 2010, and turned the Japanese company into a subsidiary in 2013. Having achieved a certain degree of headway in its efforts to shed brands and restructure operations, Renown has decided now is the time to establish a new brand.
The 115-year-old company used to be Japan's leading apparel company, but its business went south and has continued to lag. Sales for the fiscal year ended in February dipped 5% to 67.6 billion yen, leading to a net loss of roughly 600 million yen. Inventory clearance sales were the chief culprit.
An outsize dependency on department stores is a big reason for the poor earnings. Those outlets account for 62% of sales, with general merchandise stores making up 13% and e-commerce only 1.5%, or 1 billion yen. Online sales at large competitors like Onward Holdings reach around 10 billion yen, so Renown has been slow to capitalize on this growth area.