SANKYO SEIKO CO., LTD.

Business Details

A segment that undertakes the planning, production, and sale of fashion products, as well as the import sale and license business of overseas brand products. Composed of domestic and overseas consolidated subsidiaries including DAKS SIMPSON LIMITED (UK) and LEONARD FASHION SAS (France). In addition to sales to domestic department stores, the segment's main sales channels are Asian markets such as China, Hong Kong, Macau, Taiwan, South Korea, and Thailand, and it is pursuing global expansion through the opening of flagship stores. This is the core segment for "Expansion of Global Brand Business," the basic strategy of the second medium-term management plan "CHALLENGE NEXT 100."

Recent Overview

Significant decline in profit due to worsening market conditions for both the DAKS and LEONARD brands; recorded ¥1,464 million in impairment losses on trademark rights and other assets

In the Fashion-related Business for FY2026 (ending March 2026), net sales decreased 8.7% year-on-year to ¥11,226 million, and segment profit decreased sharply by 76.6% year-on-year to ¥293 million. In addition to weak store sales at domestic department stores, there was no recovery in DAKS sales in the Chinese market, and sales were also sluggish in Hong Kong and Macau due to changes in the purchasing tendencies of travelers. To reduce the risk of future loss recognition, the Fashion-related Business recorded a total of ¥1,464 million in impairment losses, including inventory valuation losses of ¥531 million (consolidated basis), ¥858 million on DAKS trademark rights (London), and ¥375 million on LEONARD trademark rights and goodwill (Paris). The unamortized balance of goodwill became zero at the end of the fiscal year under review.

Key Products

Growth Drivers

• Sales expansion through the rollout of new lines such as DAKS Men's and DAKS GOLF at domestic department stores
• Improved brand recognition and accelerated global expansion through the opening of flagship stores in major cities in Japan and overseas
• Faster decision-making and improved profitability in the Taiwan market through the consolidation of Sankyo Seiko (Taiwan) Co., Ltd. as a subsidiary
• Utilization of domestic department store channels to capture inbound demand
• Development of new customer segments through collaboration projects and pop-up store deployments with other brands
• Promotion of product planning development aimed at acquiring next-generation LEONARD customers
• Efficiency improvement of the brand business through inventory valuation reviews and optimization of brand assets

Risks

• Continued weak DAKS sales in the Chinese market (no signs of recovery)
• Weak DAKS and LEONARD sales in Hong Kong and Macau due to changes in the age group and purchasing tendencies of travelers
• Profit pressure from increased store expenses such as personnel costs, depreciation, and rent associated with flagship store openings and renovations
• Risk of additional impairment on DAKS trademark rights (London) and LEONARD trademark rights and goodwill (Paris) due to rising UK government bond yields and failure to achieve business plans
• Difficulties in domestic department store sales due to increasingly cautious consumer sentiment toward apparel amid rising prices
• Risk of economic slowdown due to cooling Japan-China relations and developments in US trade policy
• Decrease in overseas sales due to continued harsh market conditions across Asia (Asia sales: ¥6,755 million in the prior period → ¥5,892 million in the current period)