■Business Overview
1. Sales structure
The products of Nagai Leven ＜7447＞ are medical white coats and related products. The sales composition ratio by item for the 2023/8 fiscal year is healthcare wear 54.7%, doctor wear 14.6%, utility wear and others 3.1%, patient wear 17.1%, surgical wear 9.1%, and overseas markets 1.4%.
“Health care wear” is mainly a product for nurses, and “utility wear, etc.” includes utility wear (aprons, cardigans, etc., worn over white coats, etc.), shoes, and “infection control products.” The profit margin for each item does not change much, but the profit margin for “utility ware, etc.,” which has a high ratio of purchased products, is relatively low.
Also, “by market” has been adopted as a new division since the 2021/8 fiscal year. Among the domestic markets, the company's market share was divided into three markets: the “core market” (“healthcare wear,” “doctor wear,” “utility wear, etc.”), the “peripheral market” (“patient wear,” “surgical wear”), and the “overseas market” as a market with high room for future growth. The sales composition ratio for the 2023/8 fiscal year was 72.4% for the core market, 26.2% for the peripheral market, and 1.4% for the overseas market.
The sales composition ratio by product (function) for the 2023/8 fiscal year is 8.1% for high-end products, 57.7% for high value-added products, 30.1% for value-added products, 4.2% for mass-sold products, and 0.0% for the Ministry of Health, Labor, and Welfare. Nurseware's price range classification is mass-marketed products of 5,000 yen or less, value-added products of 5,000 to 7,500 yen, high value-added products of 7,500 to 10,000 yen, and high-end products of 10,000 yen or more. The higher the price, the higher the profit margin, and the policy is to focus on expanding sales of high-end products and high value-added products.
2. Sales channels and production status
The company's end users are nurses, doctors, etc., and the purchasers of the products are mainly medical facilities such as hospitals and nursing homes. However, direct sales are not carried out, and sales are carried out via traders that do business with medical facilities, etc. Thus, sales expenses are reduced, but the company's sales employees are constantly in contact with large hospitals, etc., to capture customer needs.
Previously, there were many cases where medical white coats were washed by oneself in hospitals, but in recent years they have switched to leasing due to the spread of laundry outsourcing. This lease period is usually 4 years, and demand for lease switching occurs every 4 years, which stably supports the company's performance. However, since the lease renewal cycle does not necessarily occur at the same time as the previous one, and there are cases where it changes (slips) slightly back and forth (slipping), quarterly sales may fluctuate.
As for the production system, for the fiscal year ending 2023/8 (the company alone), 99.4% of products were produced in-house and at partner factories (domestic production 46.2%, overseas production 53.2%), and purchased products were 0.6%. Overseas production is carried out in Indonesia, Vietnam, and China, but production is carried out at local partner companies' factories without having our own factories, which achieves both investment risk reduction and cost reduction.
3. Features and strengths
One of the company's strengths is that it has a system in place to consistently carry out everything from planning to procurement of raw materials, manufacturing, and sales. In terms of product planning, user needs are accurately grasped and reflected in products. Specifically, in addition to functional aspects such as being easy to work (easy to move), less likely to generate static electricity, and sterilization (suppressing bacterial growth), they also provide products with excellent design. On the manufacturing side, by directly interacting with major synthetic fiber manufacturers and textile trading companies, etc., starting with Toray ＜3402＞, which co-develops materials, it is possible to secure optimal materials, manufacture them inexpensively, and sell them with an appropriate margin.
Also, in addition to having many partner factories, they always have thousands of product items in stock since they have abundant financial resources, and they are also compatible with custom-made products. Furthermore, in response to a wide range of user needs, we have established a quick production/sales system (Quick Response System, hereinafter QR) to immediately deliver desired products on specified dates. On the sales side, it has an agency network of nearly 1,000 companies nationwide, and while sales power is strong, the company itself keeps sales expenses as low as possible.
As a result, the domestic market share in the core medical white coat market is over 60%, and it maintains a firm position as a leading medical white coat company. Also, the gross profit margin for the fiscal year ending 2023/8 has remained at a high level of 43.9%. Being able to maintain high profit margins and high market share means that many customers are satisfied with the company's products and services, and this can be said to be its greatest strength.
By consolidating management resources into the niche market of medical white coats, consistent and efficient management from planning to production and sales is possible. Also, although it is a niche market, there is still room for development in peripheral markets where the company's market share is relatively low, such as patient wear and surgical wear. The company says, “It is possible to expand the business with this medical white coat for the time being, and we will continue to actively develop surrounding markets in the future.”
(Written by FISCO Visiting Analyst Noboru Terashima)