The encyclopedia · Strategy & Leadership · Strategic decision · 1968–2023
Riki's ¥51B apparel OEM empire collapsed to ¥3.2B with ¥1.5B debt
A Japanese garment manufacturer that peaked at ¥51 billion lost 94% of revenue as cheap imports and yen depreciation made domestic production unviable.
Riki Co., Ltd. · 2023-07-19
What happened
Riki Co., Ltd. was an Osaka-based garment manufacturer founded in 1968, specializing in the production of underwear, T-shirts, sportswear, and golf wear. The company operated primarily as an OEM supplier for major Japanese apparel brands and mass retailers, building a production network that included a joint venture factory in Thailand established in the 1980s.
At its peak, Riki recorded annual revenue of approximately ¥51 billion. But the rise of inexpensive imports from other Asian countries steadily eroded its domestic production volumes. The Thailand factory, once a cost advantage, faced rising local wages that eliminated its margin edge. By the fiscal year ending January 2020, revenue had collapsed to approximately ¥3.2 billion — a 94% decline.
The final blow came from Japan's ultra-cheap yen policy, which dramatically increased the cost of imported raw materials. With no pricing power as an OEM supplier and thin margins that could not absorb the currency shock, Riki's cash flow collapsed. The company stopped operations on April 28, 2023, and received a bankruptcy commencement order from the Osaka District Court on July 19, 2023, with approximately ¥1.5 billion in liabilities.
Why it happened
- Riki was an OEM supplier with no brand, no direct customers, and no pricing power — when costs rose, it could not pass them on to anyone.
- Cheap imports from lower-cost Asian countries undercut Riki's domestic production for years, steadily shrinking its revenue base.
- The yen depreciation after 2022 made imported raw materials prohibitively expensive — as a manufacturer that sourced inputs globally, Riki had no hedge against currency policy.
- The Thailand factory, built as a cost advantage in the 1980s, became a liability as local wages rose — the margin that once existed disappeared.
The lesson
An OEM manufacturer that competes on price has no defence against currency policy — when the yen halves, raw material costs double, and the margin simply vanishes.
Aftermath
Riki Co., Ltd. stopped operations on April 28, 2023, and filed for self-bankruptcy. The Osaka District Court issued a bankruptcy commencement order on July 19, 2023, with approximately ¥1.5 billion in liabilities. The company had been founded in 1968 and once recorded annual revenue of approximately ¥51 billion. By its final fiscal year (ending January 2020), revenue had fallen to approximately ¥3.2 billion. The company had operated a joint venture factory in Thailand since the 1980s.
Sources
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