NIHONWASOU HOLDINGS,INC.

Business Details

The company handles everything from new customer acquisition through free kimono dressing classes to graduate-oriented events and sales fairs, installment sales brokerage, sewing/processing, and EC sales. It has built a "one-stop solution" business model that completes manufacturing, sewing, sales promotion, and after-care within the group. In 2026, the dressing school will mark its 40th anniversary since opening, with cumulative graduates exceeding 225,000 (as of December 2025). Major customers are Tonami Orimono Co., Ltd. (11.5% of net sales) and Nagashima Sei Orimono Co., Ltd. (11.2% of net sales).

Recent Overview

Q1 net sales slightly declined and operating loss widened; a ¥50 million fraud loss occurred as a subsequent event

For Q1 FY2026 (ending December 2026) (January to March 2026), net sales were ¥967 million (down 1.1% year on year), and the operating loss widened to ¥69 million (compared with a loss of ¥37 million in the same period of the prior year). The main cause was an increase in selling, general and administrative expenses of approximately ¥15 million year on year to ¥943 million. Aggressive promotion was conducted featuring Miho Kanno as image character. The transaction value of the Brilliance Regional Qualifying Tournament remained solid at approximately 125% year on year. Meanwhile, a decision was made to close the EC site "KAERUWA" effective April 23, 2026. Additionally, as a subsequent event, a fund outflow incident based on false instructions from a malicious third party occurred on April 30, 2026, and an estimated loss of ¥50 million is expected to be recorded as an extraordinary loss in the current consolidated fiscal year. There is no change to the full-year earnings forecast (net sales of ¥4,560 million to ¥4,660 million; operating profit of ¥397 million to ¥447 million).

Key Products

Growth Drivers

• Strengthened new customer acquisition through aggressive promotion featuring Miho Kanno as image character
• High brand recognition of the dressing school, marking its 40th anniversary in 2026, and a network of over 225,000 graduates
• Continued strong performance of events for existing customers (graduates), with the Brilliance Regional Qualifying Tournament's transaction value at approximately 125% year on year
• Enhanced customer engagement through production-area tours (Oshima Tsumugi, Arimatsu Shibori, Kyoto craftsmanship, etc.) offering rare experiential value
• Group synergies encompassing manufacturing, sewing, sales promotion, and after-care (one-stop solution)
• Full-year earnings forecasts for both net sales and operating profit remain above the prior-year actual results (no change to forecasts)

Risks

• Risk that the number of new customers for the spring dressing classes falls short of plan (seasonality and volatility in customer acquisition)
• A promotion-dependent business structure with advertising and sales promotion expenses remaining at high levels
• Impact on current-period results from recording a special loss (estimated loss of ¥50 million) related to fraud discovered as a subsequent event
• Loss of the online sales channel following the closure of the EC site "KAERUWA"
• A funding structure in the installment sales brokerage business in which payments precede collections, along with reliance on bank borrowings (short-term borrowings of ¥2,084 million and long-term borrowings of ¥1,808 million)
• A declining trend in the overall size of the kimono industry market
• Impact on personal consumption from price increases, as well as downside economic risks stemming from U.S. trade policy and the Middle East situation
• Q1 operating loss widened year on year, requiring a concentration of earnings in the latter half to achieve the full-year forecast