The encyclopedia · Strategy & Leadership · Operational decision · 2007–2023
Fuki Tokyo Division's women's clothing OEM shrank 66% as yen depreciation killed margins
A Kobe women's clothing OEM that peaked at ¥600M lost two-thirds of revenue to ¥200M as Abenomics, COVID, and extreme yen depreciation crushed margins.
Fuki Tokyo Division Co., Ltd. · 2023-10-11
What happened
Fuki Tokyo Division Co., Ltd. was a Kobe-based manufacturer and wholesaler of women's clothing, primarily for senior women. The company operated as an OEM supplier for Tokyo-based women's clothing manufacturers and also wholesaled under its own brand. Production was outsourced to contractors in China and South Korea. Founded in November 2007 with ¥3 million in capital.
At its peak in recent years, Fuki Tokyo Division generated approximately ¥600 million in annual revenue. The company was hit by a prolonged consumption slump attributed to Abenomics, which reduced consumer spending on apparel. Intensifying competition and declining profitability in the women's clothing OEM sector followed.
COVID-19 then caused logistics disruptions and a sharp rise in procurement costs, compounded by extreme yen depreciation that made overseas production far more expensive. The yen briefly appreciated at the beginning of 2023 but depreciated again, and the company could not secure a viable outlook. With its margins destroyed and peak revenue of ¥600 million fallen to approximately ¥200 million, a 66% decline, Fuki Tokyo Division filed for self-bankruptcy on October 11, 2023.
Why it happened
- Revenue fell from ¥600 million to ¥200 million, a 66% decline — the Abenomics consumption slump reduced apparel spending across the industry.
- Extreme yen depreciation destroyed the cost advantage of overseas production — OEM margins that depended on cheap Chinese and Korean manufacturing evaporated.
- COVID-19 caused logistics disruptions that compounded the procurement cost problem — even when orders existed, getting products from overseas became expensive and unreliable.
- A women's clothing OEM with ¥3 million capital had no brand or direct consumer channel — it was entirely dependent on contracts with manufacturers that could switch suppliers at any time.
- The yen's volatility made long-term planning impossible — a brief appreciation at the start of 2023 was followed by renewed depreciation, and the company could not find stable footing.
The lesson
An OEM that buys overseas and sells in Japan is destroyed when the yen collapses — it has no pricing power to pass on currency costs and no domestic cost advantage.
Aftermath
Fuki Tokyo Division Co., Ltd. filed for self-bankruptcy on October 11, 2023. Founded November 2007 in Kobe with ¥3 million capital, the company manufactured and wholesaled women's clothing for seniors, supplying Tokyo-based women's clothing manufacturers as an OEM and wholesaling under its own brand. Peak revenue of ¥600 million fell to ¥200 million (FY September 2022), a 66% decline, driven by the Abenomics consumption slump, competition, COVID-19 logistics disruptions, and extreme yen depreciation that made overseas procurement costs unsustainably high.
Sources
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