PAL GROUP Holdings CO.,LTD.
2726・Prime Market・Retail Trade
Apparel Business
Pal Group's core segment. A retail and manufacturing/sales business operating a diverse range of apparel brands.
| Period | Current | Previous | Change |
|---|---|---|---|
| Net sales (Q1 cumulative, FY2027 (ending February 2027)) | ¥38,324 million | ¥36,226 million (Q1 cumulative, FY2026 (ending February 2026)) | ↑ |
| Segment profit (operating profit) (Q1 cumulative, FY2027 (ending February 2027)) | ¥6,079 million | ¥5,710 million (Q1 cumulative, FY2026 (ending February 2026)) | ↑ |
| Segment profit margin (Q1 cumulative, FY2027 (ending February 2027)) | 15.9% | 15.8% (Q1 cumulative, FY2026 (ending February 2026)) | ↑ |
| Pal Closet app membership (end of Q1, FY2027 (ending February 2027)) | 14.07 million | Increase of more than 2 million year on year | ↑ |
| Total SNS followers of employee influencers (end of Q1, FY2027 (ending February 2027)) | Over 26.5 million | Over 24 million (as stated in prior reports) | ↑ |
| Impairment loss (Q1 cumulative, FY2027 (ending February 2027)) | ¥3 million | ¥11 million (Q1 cumulative, FY2026 (ending February 2026)) | ↓ |
Business Details
The core segment of the Pal Group, engaged in retail (purchase and sale) and manufacturing/sale of apparel and related products. The segment develops and operates diverse concept formats that capture shifting fashion trends. It promotes OMO (online merges with offline) initiatives combining SNS communication by employee influencers with the proprietary e-commerce platform "Pal Closet" to achieve both sales growth and inventory optimization. This is the flagship business, accounting for approximately 62.5% of Group net sales in Q1 of FY2027 (ending February 2027).
Recent Overview
Gross margin improved significantly through discount restraint and thorough inventory management, achieving increased sales and profit.
In Q1 of FY2027 (ending February 2027) (March to May 2026), net sales of the Apparel Business increased by ¥2,097 million year on year to ¥38,324 million, and operating profit increased by ¥368 million year on year to ¥6,079 million. Gross margin improved significantly due to more accurate timely, appropriately sized ordering leveraging SNS marketing and EC purchasing data, along with restraint on discount sales. Pal Closet app membership reached 14.07 million, and combined shipping through integration with the Miscellaneous Goods Business's EC warehouse also began from the start of the fiscal year.
Key Products
Growth Drivers
- Strengthened SNS communication by employee influencers (total followers exceeding 26.5 million) and deepening OMO initiatives to boost customer acquisition and sales
- More precise demand forecasting and inventory optimization through analysis of "Pal Closet" purchasing and behavioral data
- Improved final sell-through rates and gross margin through thorough implementation of the four-week MD cycle
- Strengthened EC sales through combined shipping of apparel and miscellaneous goods enabled by integrating Pal Closet with the Miscellaneous Goods Business's EC warehouse
- Business expansion driven by aggressive development and launch of new products to acquire new customers
- Expansion of the overseas wholesale business (opening of the third Hong Kong store, "Airside store," in April 2026)
Risks
- Risk of demand decline due to heightened consumer defensive spending amid negative real wage growth
- Impact on cost of imports and gross margin from foreign exchange fluctuations (yen depreciation)
- Structural rise in personnel and logistics costs due to labor shortages, pressuring profitability
- Risk of lost seasonal sales opportunities due to climate change (prolonged record heat and month-to-month temperature volatility)
- Concerns over global supply chain disruption from rising oil prices and potential closure of the Strait of Hormuz amid escalating Middle East conflict
- Risk of delayed profitability at "LOCUST" (despite inventory write-downs already taken in prior years, profit improvement through scrap-and-build may not proceed as planned)
Last updated: May 26, 2026