TOKYO -- Citing the sluggish Japanese economy and unseasonable weather, Onward Kashiyama Co. reported net earnings plummeted 51 percent for the year ended Feb. 28.
The manufacturer of women's and men's apparel reported earnings totaled $29.3 million (3 billion yen) at current exchange rates, or 19 cents a share (20 yen), in the year as sales dropped 14 percent, to $1.7 billion (171.5 billion yen). In the prior year, Kashiyama earned 6.1 billion yen, or 41 yen a share, on sales of 199.9 billion yen.
The company said the year included a pretax charge of $37.8 million (3.9 billion yen) from combining two manufacturing and sales subsidiaries in Italy. Pretax profits before the charge were down 38 percent to $100.5 million (10.47 billion yen.)
Kashiyama said Japan's apparel industries "faced a severe environment" last year, noting that the lagging Japanese economy and an unusually cool and wet summer sapped consumer demand. These factors offset sales and development efforts of its Onward brand, the company said.
Women's wear sales, which make up 40.3 percent of total sales, declined 6.2 percent, to $669.6 million (69.1 billion yen). Men's wear sales, which account for 51.6 percent of total volume, slumped 20 percent to $857.6 million (88.5 billion yen).
Kimono sales declined 14 percent, to $64.9 million (6.7 billion yen), while children's wear was down 7.4 percent, to $42.6 million (4.4 billion yen). Sales of miscellaneous goods, including doll clothes, were up 17 percent to $3.9 million (404 million yen).
Looking ahead, the company projected a 6 percent increase in net earnings for this year, to $31 million (3.2 billion yen) and slight sales gains. Citing continued instability in labor markets and sluggish corporate earnings, however, Kashiyama said it cannot expect a quick recovery of consumer demand.
In addition to selling apparel in Japan, Onward Kashiyama owns J. Press in the U.S., is affiliated with Jean Paul Gaultier collections in Europe and the U.S., and has a venture with Stefanel in Italy. The company also operates a factory in Dalian, China.
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