KONAKA CO.,LTD.

Business Details

The core business of the KONAKA Group, engaged in the planning, manufacturing, and sale of men's and women's business wear and related apparel, bags, jewelry, and apparel. It operates multiple brands including KONAKA・FUTATA, SUIT SELECT, DIFFERENCE, and Samantha Thavasa Group, and is composed of four categories: heavy apparel (suits/formal wear), medium apparel (jackets/bottoms), light apparel (casual wear/dress shirts), and fashion accessories (shoes/bags/jewelry). The company operates 392 stores, and the group as a whole operates 542 stores (as of the end of March 2026).

Recent Overview

Sales declined 6.8% year-on-year due to accelerated store closures and upfront investment in a new business format, while operating profit fell more than 40.6% year-on-year.

Sales in the Fashion Business for H1 FY2026 (ending March 2026) were ¥28,626 million (down 6.8% year-on-year). Segment operating profit fell sharply to ¥909 million (from ¥1,531 million in the same period of the prior year), reflecting a combination of sales decline from store closures, an increase in various expenses, and upfront investment in the new 'FUTURE SUIT TECHNOLOGY' business format. Meanwhile, demand from SUIT SELECT's Freshers season remained solid. During the interim period, 13 new stores were opened and 78 stores were closed, shrinking the group-wide store network to 542 stores. Samantha Thavasa Japan Limited breached its financial covenants at the end of February 2026.

Key Products

Growth Drivers

• Strengthening early promotional activities for the Coming-of-Age Ceremony and Freshers seasons at SUIT SELECT, and acquiring new customers through new models such as WIDE PANTS SUIT
• Expanding the AI/digital technology-driven next-generation made-to-order suit brand 'FUTURE SUIT TECHNOLOGY' under DIFFERENCE into regional areas to develop new customer segments and regions
• Improving the profit structure through the consolidation and closure of unprofitable KONAKA・FUTATA stores
• Improving the profit structure through fundamental structural reform of the Samantha Thavasa Group (withdrawal from unprofitable stores and cost reductions)
• Improving store operational efficiency and enhancing customer experience value through DX promotion

Risks

• Material doubt about going concern due to six consecutive periods of operating and ordinary losses (although the current interim period recorded an operating profit, the full-year forecast of ¥423 million in operating profit remains at a low level)
• Breach of financial covenants at Samantha Thavasa Japan Limited (syndicated loan borrowings of ¥4,432 million, as of the end of February 2026)
• Structural decline in sales due to accelerated store closures (78 stores closed in the interim period; group-wide store count down 65 from the end of the prior fiscal year)
• Significant decline in fashion accessories category sales, down 19.5% year-on-year (from ¥8,319 million to ¥6,697 million)
• Short-term increase in expenses and pressure on profitability due to upfront investment in new business formats such as 'FUTURE SUIT TECHNOLOGY'
• Rising cost-of-living concerns due to inflation, negatively affecting consumer sentiment
• Rising procurement costs due to prolonged yen depreciation and higher energy and raw material prices
• Structural decline in demand for heavy apparel (suits) due to delayed response to trends toward casualization and lighter attire