The encyclopedia · Strategy & Leadership · Strategic decision · 2014–2023
Lord Communications' 25 beauty salons collapsed with ¥1.35B debt as COVID hit
A Toyama beauty salon chain expanded to 25 stores then collapsed with ¥1.35B debt when COVID-19 emptied its chairs and fixed costs didn't.
Roldo Communications Co., Ltd. · 2023-08-25
What happened
Roldo Communications Co., Ltd. was a Toyama-based beauty salon operator, founded in 2014 with ¥5 million in capital. The company operated up to 25 beauty salons in Toyama Prefecture and neighboring regions, employing approximately 140 staff. The salons were known for their distinctive yellow and green signage.
The COVID-19 pandemic caused a sharp decline in customer visits to the salons, while fixed costs such as rent and staff salaries remained unchanged. The company struggled with prolonged losses and weakened finances, as reduced foot traffic and changing consumer behavior made it impossible to sustain the store network. Despite efforts to maintain operations, the cash flow deterioration became irreversible.
With approximately ¥1.35 billion in debt, the company was ordered into bankruptcy on August 25, 2023 at Tokyo District Court. Some stores planned to continue operating independently, but the company itself was liquidated.
Why it happened
- COVID-19 emptied salon chairs — customers stopped visiting beauty salons, but rent and salaries did not stop.
- Expanding to 25 stores created a fixed cost base that could not be supported when revenue dropped.
- The beauty salon business model requires consistent foot traffic, which the pandemic structurally reduced.
- With ¥1.35B debt and a business that depended on in-person visits, there was no path to recovery.
The lesson
A salon chain with 25 locations needs 25 streams of foot traffic — when one shock empties all of them, the fixed costs don't shrink to match.
Aftermath
Roldo Communications Co., Ltd. was ordered into bankruptcy on August 25, 2023 at Tokyo District Court with ¥1.35 billion in liabilities. Founded 2014 in Toyama City, the company operated up to 25 beauty salons with about 140 employees. Some stores planned to continue operating independently after the bankruptcy.
Sources
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