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Japan-Update

Aoki's operating profit seen down 50% in April-December

Discounts, store renovations took toll on businesswear retailer

Aoki is offering more women's suits at its renovated stores.

TOKYO -- Japanese suit retailer Aoki Holdings likely saw group operating profit drop by half on the year to above 4 billion yen ($35.5 million) in the April-December period, as discounts and store renovation costs weighed on earnings.

Sales likely rose 2% to about 133 billion yen, as cold weather in October and November drove up buying of winter clothing such as coats. Existing-store sales grew 3.7%, and customer numbers climbed 2.7% thanks to post-renovation discounts. Newly opened suit shops, karaoke facilities and members-only clubs where patrons can sip coffee and relax also contributed to top-line growth.

Yokohama-based Aoki remodeled about 100 of its clothing shops last summer to make it easier for customers to navigate stores. The renovated stores offer more large-size and women's suits. But discounts before and after renovations hurt profit. The group's bridal business appears to have suffered a drop in wedding bookings.

Aoki expects operating profit to fall 11% to 15.8 billion yen in the year ending in March. The company is expected to maintain its full-year guidance as it watches sales in the final quarter, the high season for formalwear purchases.

(Nikkei)

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