The encyclopedia · Strategy & Leadership · Operational decision · 2007–2024
Localz Only's ¥160M men's select shop in Hiroshima collapsed as COVID killed foot traffic
A Hiroshima men's select shop that peaked at ¥198M revenue shrank to ¥100M as COVID destroyed foot traffic to physical fashion stores.
Local's Only Co., Ltd. · 2024-05-23
What happened
Local's Only Co., Ltd. was a Kure City, Hiroshima-based men's clothing retailer operating the select shops 'Local's only' and 'CITY LIGHTS'. Founded in January 2007 and incorporated in April 2012 with ¥1 million in capital, the company sold men's and women's apparel, accessories, and general merchandise through its physical stores.
The business peaked at approximately ¥198 million in annual revenue for the fiscal year ending February 2018. However, revenue declined to approximately ¥100 million by February 2022 as COVID-19 decimated foot traffic to physical fashion stores. The company's attempt to diversify into a udon restaurant business failed to compensate for declining clothing sales.
The company ceased business on May 23, 2024, and filed for self-bankruptcy with approximately ¥160 million in liabilities.
Why it happened
- Revenue fell from ¥198 million to ¥100 million, nearly halving, as COVID-19 permanently reduced foot traffic to physical select shops in regional cities.
- A ¥1 million capital base with ¥160 million in debt left no financial buffer — the company was always operating on thin equity for a retail business.
- Diversification into a udon restaurant was a distress move rather than a strategic pivot — it did not generate enough revenue to offset the core business decline.
- Regional select shops in cities like Kure lack the tourist and commuter traffic of central Tokyo, making them especially vulnerable to pandemic-era work-from-home shifts.
The lesson
A regional select shop with thin capitalization has no buffer against a multi-year foot traffic decline — and diversifying into an unrelated business mid-crisis rarely saves the original.
Aftermath
Local's Only Co., Ltd. ceased business on May 23, 2024, and filed for self-bankruptcy with ¥160 million in liabilities. Founded January 2007 and incorporated April 2012 in Kure City, Hiroshima with ¥1 million capital, the company operated men's select shops 'Local's only' and 'CITY LIGHTS'. Peak revenue of ¥198 million (FY2018) fell to ¥100 million (FY2022) as COVID destroyed foot traffic. Attorney Hara Koji of Akatsuki Sogo Law Office was named bankruptcy trustee.
Sources
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