Sankyo Seiko Co., Ltd.

The Senken Shimbun published an interview with Akira Inoue, President and CEO of the Company.

 

Sankyo Seiko Accelerates Global Strategy with DAKS and LEONARD, Establishing “Affordable Luxury Brand”.

Sankyo Seiko is stepping on the gas for growth. Last year, the company acquired the French Paris Collection brand “LEONARD,” which has been called “the world’s most beautiful prints.” Together with the British fashion brand DAKS, the company will accelerate its global strategy as an affordable luxury brand. In Japan, the company has been performing well through structural reforms, such as closing unprofitable stores, reducing inventories, and strengthening full-price sales. The recurring profit target (2.5 billion yen) set in the medium-term management plan “CHALLENGE NEXT 100,” which concludes this fiscal year, was achieved in the previous year and revised upward to 3 billion yen.We interviewed President Akira Inoue about the company’s future growth strategy and corporate vision.

【Sankyo Seiko is taking an aggressive approach to management.】
In the past year, we acquired LEONARD, our partner of over 50 years. We will be able to generate significant synergies with DAKS. In July, we will open two new stores under both brands next to each other in Harbor City, a leading commercial facility in Hong Kong.
The ratio of overseas sales to consolidated operating income is increasing, and is expected to rise to 66% in the current fiscal year. Growth in Japan is limited, so we will expand overseas.

【Why Sankyo Seiko acquired LEONARD？】
LEONARD is known for its commitment to print technology. The company has over 5,000 archival designs in Paris, which is a valuable asset. In the age of digital technology, LEONARD’s artisans hand-dye each piece of fabric. No one else in the world does this, making LEONARD a blue ocean market with little competition.
This fiscal year, Sankyo Seiko will invest in LEONARD. In October, the company will open the world’s largest flagship store in Tokyo’s Omotesando district. The store will appeal to a wide range of customers, including inbound tourists from overseas. Sankyo Seiko is particularly interested in expanding its customer base to include people in their 30s and 40s. To do this, the company will revive its “Opera Line” collection, which had been discontinued. The Omotesando store will also have a press room. Sankyo Seiko is currently working with many celebrities to promote its products, and the company hopes to further deepen its relationships with stylists and increase media exposure.
Sankyo Seiko is also planning to relocate its flagship store in Paris. The company is looking for a property that can be used to showcase LEONARD’s products on one floor. Sankyo Seiko will also sell its “LEONARD SPORT” collection, which is currently sold exclusively through the company’s e-commerce website, in stores around the world. The pre-sale of LEONARD SPORT at the Paris store was well-received, and the company has received strong requests from German agents. Sankyo Seiko plans to make LEONARD a global brand that appeals to customers in Asia, Europe, and other parts of the world.

【DAKS has appointed a new creative director.】
DAKS was founded in 1894, and next year will be its 130th anniversary. We have appointed Luc Goidadin as the creative director for the anniversary collection. We will reconstruct the content of the collection and raise the brand position.
Recently, we held an event in Kyoto for VIP customers of LEONARD. We collaborated with Okura Art China to release LEONARD’s floral tea sets. At the event at Mitsukoshi Nihonbashi Main Store, we introduced the tea sets and LEONARD’s children’s clothing, which is the first time the brand has offered this product.We have opened pop-up stores at Isetan Shinjuku and Hankyu Umeda stores, with the theme of “Upcycling.” We have received a variety of requests since the acquisition, and our possibilities are expanding.

【The brand business has become more profitable.】
In Japan, we have reduced the number of SKUs and inventory for DAKS and LEONARD, and have strengthened regular price sales. The regular price sales rate has exceeded 70%, and has contributed to profits. However, we also have some regrets. We are concerned that we are not providing enough products and services to customers by narrowing down our product lineup. As the market recovers, we will enrich the products of DAKS and LEONARD, and make them more enjoyable for customers. However, we will not produce too much. We will produce and sell the right number of products in a planned manner, and maintain the regular price sales rate of 70%.
The personal order events for DAKS and LEONARD that we started under the COVID-19 pandemic have been very well-received and have become a role model for strengthening regular price sales and increasing customer satisfaction. This is an event that provides customized products that meet the individual needs of each customer while enjoying conversations with store staff. The novelties are also popular and we will continue to focus on them in the future.

【What are your key considerations when managing?】
“Always strive for the best” is Sankyo Seiko’s DNA. As a trading company, Sankyo Seiko has acquired world-class brands such as DAKS and LEONARD and has nurtured them into luxury brands. In China, Sankyo Seiko has accelerated the opening of DAKS stores and has increased the number of stores to 40. This is because DAKS is placed in the same position as other European luxury brands.
In OEM (original equipment manufacturing), Sankyo Seiko also focuses on high-priced and high-value-added products. With excellent human resources, Sankyo Seiko’s OEM business has recovered by responding with sales power and short delivery times. Sankyo Seiko will achieve stable growth with a portfolio that includes brand business, OEM, and real estate business.
Sankyo Seiko has also accelerated the speed of management decisions. Sankyo Seiko has promoted exchanges between the management of the sewing factory, Hokuriku Sankyo Seiko, and Sankyo Seiko Fashion Service, which handles domestic sales of DAKS and LEONARD. For the license line “LEONARD FASHION”, Hokuriku Sankyo is vital. Sankyo Seiko has polished its unique technical capabilities that cannot be imitated by others, and has changed its system to quickly make judgments on improving quality, speed, and strengthening lines.

【We have been working hard to contribute to society for many years.】
Sankyo Seiko is a great company. Even when the company was struggling, it continued to pay dividends for 63 consecutive years. It also established the Miki Takizo Scholarship Foundation and the Sunrise Foundation, and has been continuously contributing to society. The company believes that it is important for businesses to not only make a profit, but also to give back to society. The company tells its employees that “Your daily work is contributing to society.” This corporate culture is deeply rooted in the company.

【What is your human resources development policy?】
I am committed to opening flagship stores because I have seen the growth of DAKS with the launch of flagship stores in Hong Kong and Shanghai. I had a wonderful experience challenging the brand business overseas. I want to give these experiences and experiences to the younger generation.
Sankyo Seiko is a trading company that can challenge the world and aim for the top. We have implemented an average wage increase of 5% for the entire company, including base-up and regular salary increases, and we are also working to create a comfortable working environment. I believe that hiring people with motivation and ability regardless of gender or nationality will lead to global human resource utilization and further growth.