There's no need to explain that Fast Retailing Co., which operates Uniqlo, is a world-class apparel maker and retailer. Instead, I'm here to inform you about Fast Retailing's counterpart in the interior industry -- the colossus that is Nitori Holdings Co.
In Nitori Holdings' account settlement closing in February, sales were 642.2 billion yen, business profits were 107.4 billion yen, and the net profit for this period was 71.3 billion yen. The company thereby achieved sales and profit increases for 33 consecutive years. Although Nitori Holdings' sales profit is one-third that of Fast Retailing, Nitori Holdings has higher margins and is not overly aggressive in venturing overseas, which means the company probably has better growth potential in the future. The company aims to become a 3 trillion yen firm with 3,000 stores worldwide by 2032.
Before the company revealed its financial results for the March-May quarter on June 25, some thought that even Nitori Holdings would struggle because of the coronavirus outbreak, which became serious in Japan in March. Yet it turned out the company enjoyed increases in both sales and profits and is expecting to continue the trend until the next account settlement in February 2021, for its 34th consecutive years of growth in sales and profits.
This means Nitori's interior products are essentials, while many shops selling non-essentials are struggling. Nitori products work well with a pandemic. When you work from home, you need to turn your lounge into an office. You need to make it into a studio to take part in a Zoom videoconference. And Nitori is there to help you.
Nitori said its hit products during the stay-home period from March to May were easy-to-assemble office work furniture with simple, compact designs and stylishly designed chairs that are comfortable to sit on. The company's products sold well in all price ranges. Baskets that can be combined with colorful cubbies were also popular. When staying home, you cook and eat at home more often than before, and Nitori made a splash with its kitchen and dining-room products, such as Japanese-style tableware, wooden tableware, oven-proof dishes, glasses, cold water bottles and slip-resistant trays.
Among the rival brands of Nitori are the popular Swedish brand Ikea and Mujirushi Ryohin, or Muji. But Nitori's dominance is undeniable in Japan.
Ikea and Muji have an edge over Nitori when it comes to sophisticated designs, but Nitori is the cheapest of the three and has the widest range of products. Muji's growth has plateaued in recent years after the brand continued to grow for about 20 years. Muji's slump is attributed to poor sales in box furniture and interior goods, which is said to be an indirect cause of Nitori's advance into the urban areas.
Speaking of apparel shops, Nitori Holdings opened the first shop of its apparel wing, N Plus Co., inside the LaLaport Tachikawa Tachihi shopping center in Tachikawa, Tokyo, last October. The shop sells clothes with simple designs for women from their 30s to 60s, which are priced in the 2,000 yen to 5,000 yen range. Yet the shop is attracting attention as Nitori's move toward the apparel industry. The fifth N Plus shop opened in May inside the Aeon Mall Zama shopping complex in Zama, Kanagawa Prefecture. Currently, most clothes available at N Plus shops are purchased from manufacturers, yet it is likely that N Plus may develop more garments in-house in the future.
That prospect seems to resonate with the words of Nitori Holdings Chairman and CEO Akio Nitori, who founded Nitori, on June 25 when he publicly announced the company's first-quarter financial statement. "If there's a good opportunity in the apparel industry, I will seriously and willingly think about a merger or acquisition," he said.
Nitori Holdings may become a savior who will reorganize the struggling apparel industry in Japan.
Miura is the editorial adviser of WWD Japan.
Read more from The Japan News at https://japannews.yomiuri.co.jp/
