T.KAWABE&CO.,LTD.

Business Details

The flagship segment of the Kawabe Group, engaged in the manufacture, sale, and import/export of Handkerchief, Scarves & Mufflers, towels, sundries, and woven fabric products. Its primary sales channel is department stores, driven by urban stores capturing inbound demand. The segment leverages a vertically integrated supply chain with group companies as a strength, enabling the group to complete everything from production to sales in-house. It also operates e-commerce channels including its own EC site, ZOZOTOWN, and Rakuten Fashion. For the full year of FY2026 (ending March 2026), sales grew to 102.8% year on year, and the gross profit margin improved by 2.5 percentage points year on year due to cost reduction measures.

Recent Overview

Both sales and profit exceeded the prior year. Cost reductions and price revisions significantly improved the profit margin.

Full-year FY2026 (ending March 2026) sales in the Personal Accessories Business grew to 102.8% year on year. Handkerchief served as the driving force, up 104.0% year on year, with EC sales of POLO RALPH LAUREN also performing well. Cost reduction measures succeeded across all items, improving the gross profit margin by 2.5 percentage points year on year. Meanwhile, Scarves & Mufflers were limited to 93.3% year on year due to the warm winter. Segment profit came to ¥610 million, exceeding the prior year's ¥585 million, with progress also made in optimizing inventory levels (inventory decreased by ¥292 million year on year).

Key Products

Growth Drivers

• Expansion of inbound demand (steady demand for high-priced items from Western and Asian tourists, mainly at urban department stores)
• Expansion of EC sales of Handkerchief (licensed brands such as POLO RALPH LAUREN performing well on ZOZOTOWN, Rakuten Fashion, and the company's own EC site)
• Higher unit prices and improved gross profit margin through product price revisions (improved by 2.5 percentage points year on year in FY2026, ending March 2026)
• Continuation of cost reduction measures through group collaboration (cost reductions successful across all items)
• Development of new markets for character IP products and fan-related goods (strengthening of character IP explicitly stated in the Medium-Term Management Plan 2026)
• Promotion of new sales floor development (stimulating gift demand through new initiatives such as "Mawaru Hankachi")
• A two-pronged strategy of strengthening licensed brands and strengthening original products (policy for FY2027, ending March 2027)

Risks

• Loss of sales opportunities due to store closures and floor space reductions at large GMS (general merchandise stores) (mass retailer sales declined to 88.9% year on year)
• Risk of declining demand for seasonal items such as Scarves & Mufflers due to warm winters and climate change (93.3% year on year in FY2026, ending March 2026)
• Rising raw material costs due to exchange rate fluctuations (increased procurement costs due to yen depreciation)
• Changes in the behavior of Chinese tourists (a decline impact occurred from December 2025 onward)
• Continued purchase restraint on mid-to-high-priced items due to ongoing cost-consciousness and frugality among domestic consumers
• Widening regional disparities in domestic demand, particularly among regional stores