TOKYO — Soichi Ishihara, managing director of Kanebo Ltd., has been named president, succeeding Masao Nagata, who will become chairman.
The changes are subject to approval at a board meeting on June 29. Present chairman Kazutomo Ishizawa will become an honorary adviser.
The changes are aimed at getting restructuring strategies into place to revitalize the company’s sagging performance. At a press conference, Ishihara didn’t announce any concrete restructuring plan, but said “the mid- and long-term plans will be made within a couple of months.”
“We will strengthen divisions, including cosmetics, medical products and new materials, such as glass fiber and synthetic leather,” added a Kanebo spokesman. “Business regarding fashion has a bright future.”
Last year, the company had a net loss of $35.4 million (3.7 billion yen). A year earlier, it posted a net profit of 1.6 billion yen. Sales in 1993 dropped 17.9 percent, to $4 billion (418.9 billion).
Ishihara asserted he will get the bottom line back in the black within three years. For 1994, however, Kanebo expects the net loss to increase to $74.6 million (7.8 billion yen), and sales to remain virtually flat at about $4 billion (420 billion yen).
Breaking down its most recent results, Kanebo said sales in 1993 from its cosmetics division fell 4.9 percent, to $1.5 billion (154.3 billion yen), to account for 36.9 percent of the company’s business. Sales from the apparel division dropped 19 percent, to $637 million (66.6 billion yen), representing 15.9 percent of total sales.
In the man-made fiber division, sales declined 19.7 percent, to $697.3 million (72.9 billion yen), or 17.4 percent of total volume.
Sales of the natural fiber division fell 29.5 percent, to $456.2 million (47.7 billion yen), or 11.4 percent of total sales. In April, the firm announced a restructuring plan for the natural fibers division, including a reduction in wool spinning from 5,000 tons a year to 3,300 tons and in finishing from 12 million meters a year to 6 million meters.
Sales from overseas contributed 5.4 percent, or $217.1 million (22.7 billion yen), to the company’s overall volume.
Kanebo expects that reductions in nonprofitable businesses, such as wool, and an attrition in personnel will help its recovery. Ishihara said the firm and its affiliated companies will reduce personnel by 2,000 within three years through attrition and limiting numbers of new hires, not by layoffs. Kanebo employs about 21,000.