The Japanese consumer-electronics maker will supply 4K and other types of LCD TVs from its factories in China and Thailand for sale in Japan only at Yamada stores. The TVs, which are expected to bear the Funai brand name, are scheduled to hit the stores as soon as next spring.
Funai-brand televisions have long been absent from the Japanese market, but the company has continued to mass-produce TVs by making the most of its low-cost production capability and know-how. Some of its products are sold under the Philips brand in North America via Wal-Mart Stores and other retailers. About 4 million TVs manufactured by Funai are sold in North America each year, making TV sales in the region the company's main revenue generator.
But the company is bracing for a second consecutive annual net loss in the current year ending in March due to a slump in its North American TV business. With its group sales projected to fall 20% on the year to 134.5 billion yen ($1.29 billion), Funai's net loss will likely reach 8.2 billion yen.
The company hopes returning to the Japanese market will help stop further earnings deterioration, since it will boost sales volume as well as the factory-utilization rate. At the same time, Funai would rather stick to the limited supply deal to avoid being dragged into price-cutting competition.
For Yamada, the deal with Funai will help stock its chain stores with a variety of TVs, reducing the impact of Japanese consumer-electronics makers' ongoing efforts to shrink TV operations. The major electronics retailer is still discussing pricing with Funai, but the new offerings will likely range from low-priced models to high-value-added products.