Sankyo Seiko Co., Ltd.

On November 7, 2023, an article about our company was published in Senken Shimbun newspaper.

Sankyoseiko　Expand Overseas Business　Growth potential is “LEONARD”

Sankyo Seiko will further expand its solid overseas business. In the first half of the year, overseas sales accounted for 30% of consolidated sales and 50% of profits. The overseas business of LEONARD, a French company acquired last year, has room to grow, and is one of the challenges the company faces.

The first half (April-September) overseas results of the fashion-related business, anchored by the British “DAKS” and LEONARD, showed a 59% increase in sales and an 8% increase in profit over the same period last year. In the previous year, the impact of the urban blockade in China was significant. Operating profit already earns more than twice as much overseas than in Japan. The main overseas player is DAKS, which had 53 stores at the end of September, mainly in China and Taiwan. DAKS will open two stores in China in the second half of the year. Sales in China through overseas distributors increased 30% in the first half. In Taiwan, where there are 15 stores, the majority are women’s wear only. In the future, the company plans to increase the number of combined ladies’ and men’s stores to cultivate the men’s market.

President Inoue sees LEONARD’s overseas business as both an opportunity for growth and a challenge. LEONARD has 11 overseas stores, including two in France, most of them in Taiwan. Since the company acquired Taiwan last year, it has yet to open new stores there, but expansion and entry into the Chinese market will be key in the future. However, LEONARD has so far failed to succeed in China. The touchstones are Hong Kong, where there are many Chinese customers, and Macau, where the company plans to expand in the future. In Hong Kong, “unlike Japan, the clientele is younger, and the products that sell and the price range are different.” In the future, the company will “see what kind of products will sell,” including the use of not only European products but also products made in Japan.

The company’s aggressive investment is made possible by the fact that it has been raising its profitability by strengthening regular price sales and other measures. LEONARD’s fair value sales rate (in Japan) increased to 93% in the first half of the year.

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