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Japan-Update

Onward seen sewing up 54% profit gain next fiscal year

Japanese apparel company aims to streamline logistics, boost online sales

TOKYO -- Japanese apparel company Onward Holdings is expected to post a 54% year-on-year rise in group operating profit to about 10 billion yen ($91.8 million) next fiscal year, which ends in February 2019, as it strives to make logistics and procurement more efficient and increase online sales.

Group sales are likely to increase 2% to 245 billion yen, buoyed by mainstay women's clothing brands sold at department stores. Online channels, meanwhile, are seen contributing 12% of sales, up from this fiscal year's projected 9%.

Onward would miss its sales target of 280 billion yen under a three-year management plan through February 2019, due partly to a lack of major corporate acquisitions.

As part of cost-cutting measures, key subsidiary Onward Kashiyama will shrink its count of at least 10 warehouses per branch to about three. In the past, inventories have been shipped to branches before moving on to stores, but the company aims to trim rent and labor costs by shipping directly to stores.

Procuring goods across multiple brands is also expected to lower costs. In addition, Onward plans to continue closing money-losing stores.

For the current fiscal year, operating profit is expected to beat the company's standing forecast to reach 6.5 billion yen, up 55% on the year, with sales likely to slide 2% to 240 billion yen.

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