Konaka

Basic Information

Stock Code
7494
Industry
Retail
Category Detail
Apparel & Fashion Retailers
Prefecture
Kanagawa Prefecture
Establishment Year
November 1973
Listing Year
March 1996
Official Website
https://www.konaka.co.jp/
TSE Information
TSE Information
Yahoo! Finance
Yahoo! Finance
Other Companies
Global S, Haruyama HD, Kubotec, TakQ, AOKI Holdings, Aoyama Shoji

Overview

Konaka is a mass retailer specializing in men's suits, operating primarily in eastern Japan since its founding in 1973, with strengths in its proprietary brands and diverse store deployments.

Current Situation

Konaka recorded consolidated sales of approximately 47.8 billion yen for the fiscal year ended September 2020, but operating and net profits were in the red. It operates around 435 stores as of September 2021 across a wide area in eastern Japan. Competition is intense in the core men's suit market, and it aims to improve earnings through brand renewals and digitalization efforts. It is expanding its business scope via the absorption merger of Futata and full subsidiarization of Samantha Thavasa, while strengthening its custom suit operations. For sustainability, it prioritizes community-based management, focusing on enhancing employee welfare and customer satisfaction. Moving forward, it seeks growth centered on regional focus and brand strengthening, through store optimization and new market development.

Trivia

Interesting Facts

  • Founded in 1973, a veteran in Japan's men's suit mass retail industry.
  • Strategic regional focus limited to eastern Japan.
  • Kazushige Sato serves as creative director.
  • Owns related subsidiary Samantha Thavasa Japan Limited.
  • Developed proprietary stain-resistant and deodorizing suits.
  • Introduced POS systems in all stores by 2007.
  • Implemented labor-management improvements following overtime unpaid wage issues.
  • Previously operated in Kansai and Chubu regions but has withdrawn.
  • Actively expanding custom-made suit business.
  • Maintaining around 435 stores in community-focused deployment.
  • Actively promoting online sales.
  • Diversified into food service industry.
  • Founder Hisaji Kounaka is from Kobe.
  • Creative refresh as part of brand competitiveness enhancement.
  • Rare company holding unique New Year's first sale at stores.

Hidden Connections

  • Achieved market expansion in Kyushu region through management integration with Futata Co., Ltd.
  • Enhanced sales promotion and customer convenience via JR East Suica integration.
  • Entered women's clothing market through collaboration with Samantha Thavasa.
  • Built revenue base outside retail via bakery and restaurant operations.
  • Kazushige Sato handled design refresh, contributing to brand value enhancement.
  • Competes with Aoyama Shoji in eastern Japan men's suit market.
  • Improved labor systems following corrective guidance from Labor Standards Inspection Office.
  • Advanced sales data analysis through customer management system implementation.

Future Outlook

Growth Drivers

  • Expansion of custom-made market responding to customer needs
  • Strengthening digital sales channels alongside community-based store operations
  • Stabilization of revenue base through diversified businesses
  • Acquiring younger demographics via brand renewals
  • Rising consumer demand for sustainability and eco-friendly options
  • Growing demand for custom suits
  • Synergy effects with food service business
  • Sales efficiency improvements via POS/CRM systems
  • Employee satisfaction uplift through improved work environment
  • Store efficiency gains via region-specific optimization
  • Introduction of customer experience enhancement technologies
  • Medium- to long-term brand value strengthening

Strategic Goals

  • Complete store network optimization and strengthening in eastern Japan
  • Expand high-value brand sales ratio to 40%
  • Improve digital sales ratio to over 50%
  • Establish diversified revenue model through subsidiary collaboration
  • Achieve over 80% employee satisfaction
  • Roll out sustainability initiatives to all stores
  • Aggressive marketing to new customer segments
  • Increase custom suit sales by 1.5x current levels
  • Expand CSR activities in collaboration with local communities
  • Stably sustain profitability through management efficiency

Business Segments

Wholesale & Retail Support

Overview
Provides wholesale of men's suits and related goods, plus store support services.
Competitiveness
Extensive store network and franchise system
Customers
  • Franchise affiliates
  • Retail vendors
  • Corporate customers
  • Store operators
Products
  • Clothing wholesale
  • Store merchandise procurement support
  • Sales management systems

Food Service Industry

Overview
Expands food-related businesses through group companies and provides store operation support.
Competitiveness
Store operation expertise and diversified management
Customers
  • Bakery operators
  • Restaurant chains
  • Composite cafe operators
  • Dining establishments
Products
  • Restaurant operations
  • Franchise expansion
  • Store management

Custom-Made Suits

Overview
Strengthening provision of made-to-order suits tailored to customer needs.
Competitiveness
Advanced measurement techniques and design capabilities
Customers
  • Individual customers
  • Corporate entities
  • Groups
Products
  • Custom suits
  • Order shirts
  • Suit accessories

Competitive Advantage

Strengths

  • Community-based store deployment
  • Diverse brand lineup
  • Diversified operations via group companies
  • Strong franchise network
  • Custom suit technical expertise
  • Customer management system implementation
  • Stable base with 5.3 billion yen capital
  • 2,600 employees scale
  • High recognition in eastern Japan
  • Synergies with food service business

Competitive Advantages

  • Broad store network centered on eastern Japan provides many customer touchpoints
  • Brand reconstruction and digital enhancements to improve customer retention
  • Differentiation from competitors via high-value products like custom suits
  • Stability through diversified revenue sources via consolidated subsidiaries
  • Aggressive brand renewals and creative talent utilization
  • Advanced POS and customer management via IT
  • Strengthened industry collaboration through business-capital alliances
  • Local trust secured by sustainable regional management policies

Threats

  • Sales pressure from shrinking men's suit market
  • Customer base fluctuations due to population decline and aging
  • Intense price competition with major rivals (Aoyama Shoji, AOKI, etc.)
  • Risk of reduced consumer sentiment from economic uncertainty
  • Decline in store traffic due to COVID-19 impact
  • Declining market competitiveness from delayed brand image refresh
  • Limited overseas expansion restricting growth opportunities
  • Ongoing labor issues and labor-management relations challenges

Innovations

2024: Full subsidiarization of Samantha Thavasa Japan Limited

Overview
Promoting integrated brand operations and synergy creation through management integration.
Impact
Strengthened financial base and accelerated diversification

2023: Enhanced digital customer management system

Overview
Reviewed and expanded POS and CRM systems across all stores to bolster digital touchpoints.
Impact
Improved customer satisfaction and efficient sales promotion

2022: Expansion of custom-made suit shop DIFFERENCE

Overview
Strengthened rollout of high-value suit brand produced by Kazushige Sato.
Impact
Successful acquisition of affluent and younger customers

2021: Sanmarco Holdings franchise store operations

Overview
Strengthening group food service business for revenue diversification.
Impact
Secured new revenue streams and brand expansion

2020: Absorption merger of Futata Co., Ltd.

Overview
Achieved strengthened store network and product lineup through business integration.
Impact
Increased synergies and logistics efficiency

Sustainability

  • Promoting community-based store management
  • Measures to improve employee work-life balance
  • Resource usage review for reduced environmental impact
  • Strict customer data management and leak prevention
  • Contributions to local society and participation in regional events
  • Exploring introduction of sustainable materials
  • Proper labor-management relations and thorough legal compliance
  • Energy-saving initiatives at stores