The encyclopedia · Strategy & Leadership · Strategic decision · 2004–2022
Style Create's ¥1B beauty supplement wholesale collapsed as salons closed
A beauty supplement wholesaler peaked at ¥900M then fell to ¥450M as COVID emptied beauty salons, its only distribution channel.
Style Create Co., Ltd. · 2022-06-24
What happened
Style Create Co., Ltd. was a Nagoya-based wholesaler of health foods and diet supplements, founded in December 2004 with ¥130.6 million in capital. The company sold fruit-based diet drinks and supplements primarily through beauty salons, which served as its main distribution channel.
The company peaked at approximately ¥900 million in annual revenue, driven by demand for diet and beauty supplements sold through salon recommendation. However, the COVID-19 pandemic caused a sharp decline in beauty salon customers, and with fewer clients visiting salons, sales of the products sold through them dropped rapidly. The company also had a heavy burden of borrowings from past equipment investments.
Revenue fell to approximately ¥450 million by the fiscal year ending December 2021. With ¥1 billion in debt and no recovery in sight, Style Create filed for bankruptcy at Nagoya District Court on June 24, 2022. Its business was transferred to another company on June 28, 2022.
Why it happened
- Revenue fell from ¥900M to ¥450M, a 50% decline — losing half its revenue when COVID emptied beauty salons.
- The company's entire distribution channel was beauty salons — when clients stopped visiting salons, the products had no way to reach consumers.
- Heavy debt from equipment investments left the company with no financial buffer — ¥1B debt against ¥450M revenue was unsustainable.
- Founded in 2004, the company had a single distribution channel and no direct-to-consumer or ecommerce capability to pivot when salons closed.
The lesson
A wholesale business that sells only through one type of partner has no revenue when that partner's customers stop coming — beauty salon distribution is a single point of failure.
Aftermath
Style Create Co., Ltd. was ordered into bankruptcy on June 24, 2022 at Nagoya District Court with ¥1 billion in liabilities. Founded December 2004 with ¥130.6M capital, the company wholesaled diet supplements and health foods through beauty salons. Peak ¥900M revenue fell to ¥450M (FY Dec 2021) as COVID emptied salons. The business was transferred to another company on June 28, 2022.
Sources
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