The encyclopedia · Strategy & Leadership · Strategic decision · 1940–2021
Sanshu's ¥900M apparel wholesale bankruptcy — the second domino in Koike's chain reaction
A Nagoya apparel wholesaler that had survived fast fashion and cheap imports finally collapsed when its supplier Koike went bankrupt in May 2021.
Sanshu Co., Ltd. · 2021-07-05
What happened
Sanshu Co., Ltd. was a Nagoya-based apparel wholesaler founded in 1940 and incorporated in May 1981 with ¥30 million in capital. The company outsourced manufacturing to Chinese and Southeast Asian factories and distributed private-label products through specialty stores and mass retailers nationwide via its own sales channels and trading companies.
Sanshu's decline was gradual — cheap imports and the rise of fast fashion steadily eroded its revenue over two decades. Peak revenue of approximately ¥2.1 billion fell to roughly ¥600 million in its final year, a 71% decline. COVID-19 delivered the next blow, as retail customers slashed orders and delayed payments.
The fatal trigger came in May 2021, when Koike Co., Ltd., Sanshu's key supplier, filed for civil rehabilitation with ¥6.5 billion in debt. The supply disruption made it impossible for Sanshu to fulfill orders, and with its own finances already critically weakened, the company was forced into bankruptcy proceedings at the Nagoya District Court on July 5, 2021, with approximately ¥900 million in liabilities.
Why it happened
- With revenue down from ¥2.1 billion to ¥600 million over two decades, Sanshu had been living on borrowed time — cheap imports and fast fashion had already won the market.
- COVID crushed Sanshu's remaining retail customers, slashing orders and causing payment delays that the company's thin margins could not absorb.
- Koike's collapse in May 2021 severed Sanshu's supply chain — a company already on the brink could not find alternative suppliers fast enough to keep operating.
- With ¥30 million in capital against ¥900 million in debt and annual revenue of just ¥600 million, Sanshu had no financial resources to restructure or pivot.
The lesson
In a fragile supply chain, one domino falling brings down the next — a company already weakened by decades of decline cannot survive a supplier's collapse no matter how long it has been in business.
Aftermath
Sanshu Co., Ltd. was ordered into bankruptcy proceedings by the Nagoya District Court on July 5, 2021, with approximately ¥900 million in liabilities. The company was founded in 1940 and incorporated in May 1981 with ¥30 million in capital. Attorneys Akinori Nishiwaki and Kengo Katsumata were appointed as bankruptcy trustees. The collapse was triggered by the May 2021 civil rehabilitation filing of its key supplier, Koike Co., Ltd. (¥6.5 billion debt).
Sources
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