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The Correlation Between the Collapse of the Apparel Industry and the COVID-19 Pandemic
- Writing language: Korean
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Base country: Japan
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- Fashion
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Summarized by durumis AI
- In 2023, the number of bankruptcies in Japan's apparel wholesale and retail industries increased by 30.9% year-on-year. Amidst this trend, RC Corporation, which operated the Leicazen brand, filed for civil rehabilitation in October, paving the way for the company's liquidation.
- Leicazen, which enjoyed a period of prosperity in 2012 with annual sales reaching 55 billion yen, faced declining sales and financial difficulties following the COVID-19 pandemic. The company eventually lost its brand value due to shifting consumer preferences and insufficient product competitiveness.
- Leicazen's situation serves as a prime example of the impact the COVID-19 pandemic has had on the apparel industry. The apparel sector is now preparing for a new leap forward by adapting to changes, including digitization and strengthening online sales.
The COVID-19 pandemic had a significant impact on the global economy. The apparel industry was one of the sectors that suffered greatly from the pandemic. In 2023, the number of bankruptcies in Japan's apparel wholesale and retail businesses increased by 30.9% year-on-year to 195, with the company that operated the Ray Cassin brand having the largest debt.
Ray Cassin, which started as RC Corporation in 1994, was enjoying a boom, operating about 50 stores and generating annual sales of 55 billion yen as of September 2012. However, with the spread of the novel coronavirus infection, sales for the period ending September 2020 fell 24% year-on-year, resulting in operating losses.
Ray Cassin, which had been struggling financially due to the impact of COVID-19, was acquired by Gordon Brothers Japan (GBJ) in March 2023. However, tax arrears amounting to hundreds of millions of yen became a stumbling block, and the company filed for civil rehabilitation proceedings in October. Subsequently, it decided to sell off its business segments to various companies and liquidate its legal entity.
The "Heisei Generation in their 20s," who were once the main target audience for the Ray Cassin brand, are now in their 40s and their tastes have changed. When "Reiwa Generation in their 20s and 30s" were recently asked, they said that the brand was "not attractive in terms of price and design." It appears that the brand lacked originality and product strength to satisfy diverse tastes. From the perspective of suppliers, "it wasn't a brand, but rather an era that has come to an end."
COVID-19 has dealt a severe blow to the apparel industry. Numerous brands and companies have faced significant difficulties due to declining customer demand, store closures, and disruptions in supply chains. The case of Ray Cassin demonstrates the impact of the pandemic on the apparel industry.
Now that the COVID-19 situation has subsided, the apparel industry is striving to overcome the crisis and adapt to changing consumer demands. It is seeking a new leap forward through strategies such as digitalization, strengthening online sales, and enhancing environmental friendliness and sustainability. COVID-19 has brought about a major transformation in the apparel industry, but it is expected to use this as an opportunity to advance to the next level.
