The encyclopedia · Strategy & Leadership · Strategic decision · 1997–2023
Garé's women's apparel wholesale collapsed as COVID and weak yen squeezed it
An Osaka women's apparel wholesaler saw revenue halve from ¥800M to ¥400M with ¥500M debt as COVID and yen depreciation crushed its margins.
Garé Co., Ltd. · 2023-03-30
What happened
Garé Co., Ltd. was an Osaka-based wholesaler of women's apparel, specializing in misses and mature women's wear under its own planning and design. Founded in April 1997 with ¥10 million in capital, the company outsourced manufacturing to Chinese factories and sold through textile trading companies to mass retailers and specialty stores, with some OEM supply to major women's apparel manufacturers.
At its peak, Garé generated approximately ¥800 million in annual revenue (FY Feb 2020). The COVID-19 pandemic caused a sharp decline in apparel demand, while bad debts from struggling retail clients added to the losses. The ultra-weak yen under the Kishida administration dramatically increased the cost of imported goods from China, on which Garé depended entirely for manufacturing.
Revenue fell to approximately ¥400 million by the fiscal year ending February 2022. With ¥500 million in debt and no way to pass on rising costs to price-sensitive retailers, the company suspended business on March 27, 2023 and filed for self-bankruptcy.
Why it happened
- Revenue halved from ¥800M to ¥400M while debt reached ¥500M — more debt than annual revenue.
- COVID-19 reduced apparel demand across the industry, cutting orders from mass retailers and specialty stores.
- Bad debts from struggling retail clients added losses on top of declining sales.
- The ultra-weak yen made Chinese imports dramatically more expensive, destroying margins on outsourced manufacturing.
- As a wholesaler with no direct-to-consumer channel, Garé had no pricing power to pass rising costs to retailers.
The lesson
A wholesaler that outsources everything to China and sells to struggling retailers has no margin left when the yen halves — the cost rise goes straight to the bottom line.
Aftermath
Garé Co., Ltd. suspended business on March 27, 2023 and filed for self-bankruptcy with ¥500 million in liabilities. Founded April 1997 with ¥10M capital in Osaka, the company planned and wholesaled women's apparel for misses and mature customers, outsourcing manufacturing to China. Peak ¥800M revenue (FY Feb 2020) fell to ¥400M (FY Feb 2022) as COVID, bad debts, and the ultra-weak yen destroyed margins.
Sources
spotted an error? The club wants to know.
More like this
Asics Trading ends four of its own shoe brands — everything becomes ASICS
A 43-year-old Japanese shoe brand gave up its stores and went back to being a contractor
Right-on shrank from 500+ jeans stores to 230 in a decade and was absorbed by World
Somewhere, someone solved the problem this company failed at. 2nd Opinion →
Comments · 0
Sign in to join the comments.