The encyclopedia · Strategy & Leadership · Operational decision · 1970–2024
Scalar's ¥1B hosiery business collapsed when a generation stopped wearing pantyhose
A 53-year-old hosiery manufacturer peaked at ¥7.7B in revenue but was killed by cheap imports, shifting fashion, and remote work ending the need for stockings.
Scalar Co., Ltd. · 2024-04-03
What happened
Scalar Co., Ltd. was an Osaka-based manufacturer of stockings, tights, and high socks, founded in November 1970 with ¥45 million in capital. The company operated its own factory in Kagoshima Prefecture and supplied hosiery products to retailers across Japan.
The company reached peak revenue of approximately ¥7.7 billion, and in some years exceeded ¥10 billion. However, the Japanese hosiery market was being eroded from two directions. Cheap imported products undercut prices. More fundamentally, a cultural shift in women's fashion — toward casual wear and away from formal stockings — meant a generation stopped wearing pantyhose. COVID-19 and the shift to remote work delivered the final blow, eliminating the need for stockings in daily office life. By the fiscal year ending December 2021, the company was already insolvent.
Scalar suspended business on February 14, 2024, and the Osaka District Court ordered bankruptcy proceedings on April 3, 2024, with approximately ¥1 billion in liabilities.
Why it happened
- Peak revenue of ¥7.7 billion fell to insolvency — a cultural shift away from pantyhose permanently removed a generation of customers from the market.
- Cheap imports from overseas manufacturers undercut prices on the remaining demand — the company could not compete on cost against countries with lower labor expenses.
- COVID-19 and remote work eliminated the daily need for stockings in office life — a product whose usage was tied to workplace dress codes lost its core use case overnight.
- The company had factories and fixed costs built for ¥10 billion-scale production — when revenue collapsed, the cost structure could not shrink fast enough.
The lesson
When a product's market disappears because a generation changes what it wears, no amount of efficiency or cost-cutting can save the business — the demand itself is gone.
Aftermath
Scalar Co., Ltd. was ordered bankrupt by the Osaka District Court on April 3, 2024 (Reiwa 6, Case No. Fu-1032), with ¥1 billion in liabilities. Founded in November 1970 in Osaka, the company manufactured stockings, tights, and high socks at its Kagoshima factory. Peak revenue exceeded ¥7.7 billion, at one point reaching ¥10 billion. Cheap imports, a cultural shift away from pantyhose, and COVID-19's elimination of office dress codes destroyed demand. Attorney Yutaka Kono was named bankruptcy trustee.
Sources
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