The encyclopedia · Strategy & Leadership · Operational decision · 1985–2024
Baruju's ¥350M women's underwear wholesale business ended by weak yen and inflation
A 39-year-old Tokushima underwear wholesaler was killed when the weak yen made imports from China unaffordable and consumers stopped spending.
Baruju Co., Ltd. · 2024-12-13
What happened
Baruju Co., Ltd. was a Tokushima-based wholesaler of women's underwear, founded in February 1985 with ¥10 million in capital. The company supplied lingerie and undergarments to retailers across Japan, relying on imports from China for cost-effective manufacturing.
COVID-19 was the first disruption — logistics chaos and declining retail orders hit the wholesale business hard. Just as the industry began stabilizing, the Kishida administration's ultra-weak yen policy caused the cost of imports from China to soar. Domestic inflation then triggered a consumer recession, and Baruju could not pass the higher costs on to its retail customers. With peak revenue of approximately ¥350 million — the same as its total debt — the company had no margin to absorb the compounding crises.
Baruju ceased business operations on October 15, 2024, and was ordered into bankruptcy proceedings by the Tokushima District Court on December 13, 2024, with approximately ¥350 million in liabilities.
Why it happened
- The weak yen made Chinese imports prohibitively expensive — for a wholesaler whose entire cost base depended on affordable overseas manufacturing, this was an existential shock.
- COVID-19's logistics disruption and sales decline had already weakened the company — the weak yen hit when Baruju had no reserves to absorb it.
- Domestic inflation created a consumer recession, and retailers refused to accept higher wholesale prices — Baruju was caught between rising costs and fixed prices.
- Peak revenue of ¥350 million and debt of ¥350 million meant the company was always thinly capitalized — one good year could cover all its liabilities, but one bad year was terminal.
The lesson
A wholesaler whose entire cost base depends on foreign imports has no buffer against currency policy — when the yen collapsed, the business model collapsed with it.
Aftermath
Baruju Co., Ltd. was ordered bankrupt by the Tokushima District Court on December 13, 2024, with ¥350 million in liabilities. Founded February 1985 in Tokushima City, the company wholesaled women's underwear nationwide, relying on Chinese imports. COVID-19 disrupted logistics and sales, then the weak yen made Chinese imports unaffordable. Inflation created a consumer recession, and the company could not pass higher costs to retailers. Peak revenue was ¥350 million. Attorney Asami Suzuki was named bankruptcy trustee.
Sources
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