Company history

Renown began in 1902 as a wholesale house for textile sundries, opened in Osaka by Sasaki Yasohachi under the trade name Sasaki Eigyobu. The name it is remembered by arrived twenty years later: in 1922 the British Crown Prince came to Japan aboard the battlecruiser HMS Renown, Sasaki saw the gold letters RENOWN on the crewmen’s cap badges, and adopted the word as a product name from 1923. Almost no Japanese clothing then carried a name written in katakana, and the oddity of it worked as a marker on the shop counter.

The company briefly ceased to exist — absorbed in 1944 into the trading house Kosho — and was re-founded in 1947 around Onoe Kiyoshi and Honma Yoshio; Onoe’s father had helped Sasaki start the business, so the involvement ran across two generations. The corporate name only caught up with the product name afterwards: Renown Shoji in 1955, Renown Inc. in 1967, and in 1968 the absorption of Renown Kogyo, which put planning, production and selling inside one company. A wholesaler had rebuilt itself as a maker.

Its real strength, though, was never the product. In 1956 it laid a national network of five sales subsidiaries, and in 1959 launched the Renown Chain Store plan: cheap, sound underwear branded 暮しの肌着 shipped in its own steel display case and placed on the counter of every small-town clothing shop. Those shops, not department stores, were where ordinary Japanese bought clothes, and no other company had organized them nationally. Renown secured the selling space first and let the goods follow — and it spent nothing on cultivating designers, because, as one veteran put it, until the 1970s the designer could be anyone so long as the channel was properly built and the quality held. Shares were listed in Tokyo and Osaka in 1963. Then the colour television commercial Ie-Ie (1967) carried the name far beyond clothing, and the 1969 launch of Arnold Palmer put the umbrella mark on goods sold to every age and both sexes, through department stores and mass retailers alike. That last habit — one brand on two very different floors — would have been unthinkable to a later generation of apparel managers, but while the goods sold there was no argument inside the company against widening the shelf further.

The 1970s were an almost unbroken climb. Sales went from ¥46.7bn in FY1971 to ¥161.0bn in FY1976 — 3.4 times in five years — and reached ¥205.8bn with ordinary profit of ¥11.6bn in FY1980, roughly six times the sales and twelve times the profit of a decade earlier, with the equity ratio lifted from 19% to 39%. The engine was the sales-subsidiary network: regional companies covering every local mass retailer, specialty store and clothing shop outside the department stores and the national chains. A former executive said plainly that in Renown’s most profitable years, when mass retailers and specialty stores drove Japanese clothing, the sales subsidiaries were what pulled the earnings. Brands were defined by who would buy them rather than by who designed them — D’urban, founded in 1970, was aimed at “a 35-year-old, university-educated Tokyo salaryman.”

Management style matched. Renown was known for what it called an un-Japanese management of enjoyment; chairman Honma Yoshio explained that the firm and the job were only means to an individual’s enjoyable life, and Onoe Kiyoshi cut through the idealism by saying that enjoyment, for someone who works, comes down in the end to pay. It was implemented as a pay system: on top of the usual summer and winter bonuses, a special bonus tied to each division’s own profit and loss, so that managers of the same rank might receive ¥1,000,000, ¥100,000 or ¥50,000. In FY1976 labour productivity of ¥6.9m and a labour share of 64.8% both ran ahead of the listed-company averages of ¥6.39m and 52.2%. Onoe himself stepped back in 1975 into a post he invented for the purpose — a chairmanship with no authority and no responsibility — yet remained the company’s discipline until his death in 1988.

Operating profit peaked at $48.5M (¥11bn) in FY1981 and was never beaten again. By FY1989 it had fallen to ¥2.5bn, against ¥17.4bn at Onward Kashiyama and ¥10.3bn at Sanyo Shokai in the same year. The market had moved: Japanese “DC” designer labels and imported names now sold on a designer’s sensibility, which was precisely the capability Renown had chosen not to build. It did respond — abandoning identical nationwide programmes for mass retailers in favour of store-by-store planning in 1982, launching twenty-eight new brands at once in 1985, and reorganizing into business units with combined planning, production and sales authority in 1989 — but none of it restored the profit. What did hold up the reported numbers was money: non-operating income ran near ¥10bn every year from FY1985 and reached ¥14.8bn in FY1990, keeping ordinary profit around ¥10bn while the operating business decayed. The company’s own later verdict was that being able to manufacture profit through financial engineering was exactly what deepened the wound.

In October 2003 Renown and the menswear house D’urban signed a memorandum to combine; shareholder meetings approved in December, and in March 2004 a share transfer created Renown D’urban Holdings, listed on the First Section of the Tokyo Stock Exchange. Consolidated sales were ¥124.7bn in the year to February 2005. Tidying the subsidiaries produced three consecutive years of operating profit from FY2004, and roughly ¥30bn of combined accumulated losses was written off against reserves. In November 2005 the investment firm Kaleido Holdings put in $90.8M (¥10bn); in March 2006 the two operating companies were absorbed, the name reverted to Renown Inc., and the womenswear house Leilian was brought in as a subsidiary.

With three profitable years and fresh capital, Renown went on the offensive: about ¥6bn over three years from 2006 to rebuild Aquascutum’s product planning, a second attempt at the United States, the revival of Norma Kamali to cover the young-career segment it lacked, and more department-store doors. Consolidated sales recovered to ¥176.3bn in the year to February 2007, with 3,972 employees. The stamina was not there. A later president said frankly that the company had not had the strength to push out that far, and FY2007 swung back to a ¥2.1bn operating loss. In October 2008 Renown turned to cash: sell Aquascutum, kill sixteen unprofitable brands, cut 400 staff, sell the Gotanda head office and the Osaka distribution centre. President Nakamura Minoru called Aquascutum a superb brand with nearly 160 years behind it and real prospects, and said the decision to sell it was unavoidable. On 5 September that year Kaleido had already sold its stake to the Neoline group for ¥2.6bn — two years and ten months after investing ¥10bn, and ten days before Lehman Brothers failed.

The new lead shareholder pushed into management. Neoline demanded three board seats in 2009; Renown countered by removing the entire board and promoting Kitabata Minoru, the head of corporate planning, to president at 47. Aquascutum was sold that September and Leilian in January 2010, and with both brands gone consolidated sales fell from ¥129.1bn in the year to February 2010 to ¥73.3bn a year later, with employees down from 3,851 to 1,571. Almost everything saleable had been sold. In July 2010 the Chinese textile group Shandong Ruyi subscribed to a placement of about $45.6M (¥4bn) for roughly 40% — the first time a Chinese company had taken over a First Section listed firm — and a further ¥2.9bn in December 2013 lifted the group above 53%. Kitabata had chosen an operating company over the investment funds also at the table, on the reasoning that a partner who could cut costs and open Chinese channels was worth more than one who would exit in a few years. The numbers never turned: in the twenty-three years from 1992 only two closed in the black, both on gains from asset sales, for a cumulative net loss of ¥177.2bn, and sales slid from ¥72.2bn (FY2014) to ¥63.7bn (FY2018). The end came through the parent itself. In the ten-month period to December 2019 Renown could not collect receivables from a Shandong Ruyi subsidiary and booked a ¥5.3bn bad-debt provision; sales were ¥50.3bn against an operating loss of ¥8.0bn, and net assets of ¥15.3bn stood below a tenth of the 1991 peak. Shandong Ruyi, jointly liable, did not honour the guarantee. March 2020 same-store sales fell 42.5% year on year and April 81% as the pandemic emptied the department stores that supplied nearly 60% of parent sales — seven weeks after Mouri Kenji had become president on 26 March. On 15 May 2020 the Tokyo District Court opened civil rehabilitation proceedings over about ¥13.8bn of debt; the listing that began in 1963 ended in June after 57 years; no sponsor would take the whole company, D’urban and a few other brands were sold off separately, and in November the case converted to bankruptcy, in the 118th year. Reading that ending as one management team’s failure explains only part of it: Renown grew by organizing the small shops and the mass retailers, shrank as those floors shrank, and the department stores it fell back on were themselves retreating — Onward closed some 700 stores in FY2020 and Sanyo Shokai withdrew from as many as 150 unprofitable counters.