LEC,INC.
7874・Prime Market・Chemicals
Business
REC Co., Ltd. is a household goods manufacturer founded in 1983 that plans, manufactures, and sells cleaning products, household sundries, sanitary consumables, and other items. The group conducts business through 21 subsidiaries and 1 affiliated company, and is organized as a single segment, the Daily Sundries & Apparel Business. Its main customers are major 100-yen shop operators Daiso Industries Co., Ltd. (32.8% of net sales) and Seria Co., Ltd. (13.3% of net sales), and its strength lies in its supply capability to mass retail channels. In recent years, the company has expanded into character-related products, insecticides under the Balsan brand, and drink products such as Gronsan, advancing diversification of its product portfolio.
Business Model
Under a production system combining in-house group factories and cooperating factories, the planning and development department established within the head office's Shizuoka Planning Department continuously creates new products. Products are delivered to consumers mainly through mass retail channels such as 100-yen shops. The company aims to improve gross profit margin by combining sales mix improvement through product renewal/discontinuation with cost reductions in the production process, while expanding its business scale by raising brand awareness through promotional activities such as TV commercials and new product launch events, forming a revenue structure built on this approach.
Company Strengths
The company has established a planning and development function within the Shizuoka Planning Department at its head office, investing ¥1,764 million in R&D expenses to continuously create new products such as cleaning supplies, character collectible products, Balsan brand products, and cosmetics. Of the ¥2,117 million in capital expenditures, ¥880 million was allocated to molds for new products, supporting a high-mix, low-volume production system.
The company has a stable sales base with sales to Daiso Industries Co., Ltd. of ¥22,423 million (32.8% of net sales) and sales to Seria Co., Ltd. of ¥9,051 million (13.3% of net sales), with the top two accounts representing approximately 46% of net sales. As a manufacturer with vendor capabilities for 100-yen shop channels, the company has also established a logistics system, building the capacity to respond quickly to requests from business partners.
The company acquired the insecticide business under the Balsan brand from Lion Corporation in 2018, making it a consolidated subsidiary, and in June 2024 acquired the drink product business for Gronsan and Guromonto from the same company, among other continuous efforts to expand its business domains through the acquisition of external brands.
ENVALITH's Perspective
Performance Trend
Revenue increased for five consecutive periods, from ¥51,423 million in FY2022 (ended March 2022) to ¥68,294 million in FY2026 (ending March 2026). Operating profit declined to ¥911 million in FY2023 (ended March 2023) but subsequently recovered to ¥4,136 million in FY2026 (ending March 2026) as the effects of product line rationalization and cost reductions accumulated. Net income for the period also increased sharply to ¥2,978 million (up 78.6% year on year). The main driver was improvement in the gross profit margin (from 26.3% to 30.3%); despite external headwinds such as persistently high raw material prices and continued yen depreciation, the company achieved margin improvement through its own efforts. Operating cash flow doubled to ¥9,030 million (from ¥4,213 million in the prior period), and the financial position also improved, with the equity ratio recovering to 40.0% (from 38.7% in the prior period).
Growth Strategy
Aiming for sustainable business expansion and profitability improvement through four pillars: new product development, character collaborations, M&A, and production efficiency.
Continued strengthening of collaboration products combining proprietary brands such as Balsan with characters, as well as development of fan-favorite merchandise. Amid a consumption environment marked by frugality, the company differentiated through value-added appeal, and in FY2026 (ending March 2026), Household Sundries increased 7.3% year on year to ¥28,067 million, making it the largest contributor to revenue growth.
In June 2024, the company acquired the drink formulation business for "Gronsan" and "Gromont" from Lion Corporation, achieving expansion of the "Others (Drinks, Cosmetics, Home Appliances, etc.)" category (including anti-insect and anti-virus products, cosmetics, home appliances, food, and drink formulations). The provisional accounting treatment was finalized in the first quarter of FY2026 (ending March 2026), with goodwill fixed at ¥1,243 million.
Continued implementation of sales mix optimization through rationalization of existing products, alongside productivity improvements via process review and cost reduction. In FY2026 (ending March 2026), gross profit margin improved to 30.3%, and operating profit margin reached 6.1%. In FY2027 (ending March 2027), the company plans to continue promoting new product development, existing product rationalization, and operational efficiency improvements in response to rising raw material prices.
Continued active promotional activities such as TV commercials and new product launch events to enhance brand recognition of key products and acquire new customers. The consolidated financial forecast for FY2027 (ending March 2027) projects net sales of ¥70,500 million (up 3.2% year on year) and operating profit of ¥4,200 million (up 1.5% year on year).
Last updated: July 19, 2026