■Fujibo Holdings＜3104＞ Company Overview
(c) Lifestyle clothing business (formerly textile business)
We manufacture and sell high-quality underwear with a focus on B.V.D. The two brands, B.V.D. and Angle, account for 75% of lifestyle clothing business sales. By narrowing it down to highly profitable products, we have now achieved an operating margin of 11.2%. In particular, by strengthening e-commerce sales (internet sales), we are developing new customers and responding in detail to customer needs. E-commerce sales started in 2005, and we are focusing even more on our 2017 medium-term management plan.
The company's subsidiary Angle Co., Ltd. (formerly Angle Miyuki Co., Ltd.) was acquired from Toyobo ＜3101＞ in 2012. Originally, they sold luxury innerwear centered around department stores, but department store sales continued to be sluggish, and inventory was piled up, and it became impossible to make money. So it looks like department store sales were reduced and shifted to e-commerce sales. Fujibo Apparel Co., Ltd. and Angle merged in 2020 to accelerate e-commerce sales. Other than that, they are also working on some luxury brands. There are super luxury underwear using vicuña, B.V.D. luxury type (heavy weight series), and the hugely popular summer product “cool bra (approx. 33g lightweight).”
At its peak, sales of the same business were on the scale of tens of billion yen, but then it fell into a long-term textile recession, and steady rationalization activities such as shrinking/withdrawal of unprofitable products and inventory reduction were promoted, and profits came out. Although the scale of sales has now shrunk, high-efficiency sales and a low cost structure have been realized by converting the business model to e-commerce, and a high-profit business transformation has succeeded. Garment factories were consolidated into Thai factories, and domestic and Chinese garment factories all withdrew, making them lighter. Core competencies have also shifted from conventional manufacturing to marketing, product planning, branding, etc., and resources (people, goods, money, information) have also changed drastically.
(d) Other (chemical products) business
The company's chemical products business has developed a molding processing business using injection molding technology that is highly evaluated in the precision machinery and medical fields. In 2018, Tokyo Mold Co., Ltd., a resin mold company, became a subsidiary. Thus, a one-stop process between upstream (mold design/manufacture) and downstream (injection molding) has been realized, and options for customers have expanded. Tokyo Mold has transactions with automobile tier 1 (auto parts), contributing to the expansion of the company's new business partners. Also, IPM Co., Ltd. was acquired in 2022. It is now possible to strengthen proposals that combine a broad lineup of molds in the precision small mold field with molds and injection molded products, and it is responding to the diverse needs of customers.
The chemical mold market tends to be polarized between unprofitable mold companies and competitive high-profit mold companies, but Tokyo Mold and IPM are the latter high-profit mold companies. Incidentally, Tokyo Mold is competitive and well known for the automobile industry in terms of accuracy, price, delivery, and quality, and has gained strong trust from customers.
There is a strong business synergy between the injection molding business (conventional in-house business) and the resin mold business (Tokyo Mold, IPM acquisition business), and the idea is to position it as the company's strategic business and develop it as the “fourth pillar” in the future.
3. Features and strengths
(1) Niche No. 1 chosen by customers
“Niche No. 1 chosen by customers,” which is what the company's medium-term management plan “Enhancement 21-25” should look like, is a feature and strength. “Niche No. 1” has two meanings; one is “niche position in the business domain” commonly used, and the other is called “niche in the sense of clearly responding to customer needs.” In the abrasives business, the company has succeeded in “becoming a big fish in a small pond” with soft pads developed independently against the de facto standard (standardization) strategy of Western top market share companies. Also, in the chemical industrial products business, major chemical manufacturers have established a niche No. 1 position with contract production of small-lot intermediate products that are not produced in-house.
(2) Focus on profit
The company said, “We do not pursue sales scale. “Focus on profit” has been thoroughly implemented. The background to this is the experience of implementing “business structural reforms” that began in 2006. In fact, the old textile business shrank from sales of 50 billion yen in 2006 to 30 billion yen in 2008 due to the Lehman shock. Meanwhile, rationalization and structural reforms were promoted, and multiple factories were closed to break away from the deficit situation. It has now achieved an operating profit margin of 10% (excluding the semiconductor recession period from the second half of the fiscal year ending 2023/3 to the first half of the fiscal year ending 2024/3), and it has successfully transformed into a high-profit business. Since management and field executives embody this story, we see that the management axis will not waver even after the transition to a new management system.
(3) Apply technology derived from textile technology
The company's technology, which has developed into film processing technology and nonwoven technology as an extension of rayon technology, is originally based on fiber-related technology. The abrasive material (soft pad) utilizes organic synthesis technology (polyurethane resin) and film processing technology. Meanwhile, industrial chemical products are also derived from rayon materials (carbon disulfide).
(Written by FISCO Visiting Analyst Keiji Shimizu)