Company history

Sanyo Shokai began as a wartime trading shop. In December 1942 Nobuyuki Yoshihara opened a sole proprietorship in Itabashi, Tokyo, to make and sell “industrial goods and textile products”; in May 1943 he incorporated it with capital of ¥50,000 and started repairing and selling machine-tool accessories. Under the controlled wartime economy the company hedged across two unrelated trades, and by 1944 it had been renamed Sanyo Shokai Seisakusho with a factory in Toshima and a sales office in Ginza.

Defeat in August 1945 removed the machine-tool demand, and Yoshihara switched the main business to raincoats — a choice that turned on two facts. Clothing was one of the few sectors that promised both domestic demand and foreign-exchange savings under the postwar textile rationing system, and Nihon Gomu Kogyo (today Okamoto) was the only domestic producer of rubberised raincoats. In September 1949 Sanyo Shokai signed on as that maker’s sole distributor: without owning a plant, it held a monopoly on a scarce supply.

What it did with that monopoly mattered more than the monopoly itself. Through the 1950s the company pushed raincoats into department stores and positioned a piece of rain gear as premium clothing rather than a utility item. Japan’s department stores were reclaiming their place at the top of the apparel channel, and Sanyo Shokai fixed its business model there — a wholesaler selling other companies’ products through someone else’s sales floor. That template, set within a few years of founding, would govern the next seventy.

In 1965 Sanyo Shokai took the exclusive Japanese licence for Burberry. The fit was exact: a British warrant-holding raincoat house famous for the gabardine trench, handed to the Japanese firm that already sold raincoats as luxury through department stores. It was also a decision about what kind of company to be — rather than build a name of its own, Sanyo Shokai would acquire the rights to foreign ones. That choice effectively set the next half-century of strategy.

The licence was then worked harder in Japan than in Britain. Sanyo Shokai ran trenches, suits and accessories through the department-store channel until “Burberry” and “Sanyo Shokai” were the same thing to Japanese consumers, and it created Burberry Black Label and Blue Label — Japan-only sub-brands it planned and merchandised itself for younger and mid-price buyers. What was a quiet heritage label at home became a high-status fixture of the Japanese menswear floor. The company listed on the TSE Second Section in 1971 and moved to the First Section in 1977; overseas subsidiaries in New York, Milan, Hong Kong, Taipei and later Shanghai were built mainly to serve sourcing and logistics for the brands it carried.

The peak years are visible in the accounts. Consolidated sales ran around $1.2B (¥142bn) through the 2000s with ordinary profit between ¥9bn and ¥13bn, shareholders’ equity reached ¥66.5bn in 2007, and interest-bearing debt stayed modest. In December 2000 the company opened the Burberry Ginza store — later SANYO GINZA TOWER — making the brand’s Japanese standing physically visible on the country’s most expensive retail street. It was, on every measure, a stable premium apparel company; the one thing it did not control was the asset the whole structure rested on.

The 2008 financial crisis hit both ends of the model at once: global demand for luxury contracted while footfall in Japanese department stores fell. Sales dropped from ¥143.1bn to ¥133.0bn in 2008 and to ¥114.2bn in 2009, when the company posted an ordinary loss of ¥5.4bn — its first serious loss. The recovery that followed was equally sharp, with ordinary profit back to ¥10.3bn by 2014 on the strength of the Burberry business.

Behind the rebound the ground was moving. From the late 2000s Burberry’s British parent was steering towards running Japan directly, and by the early 2010s the renewal talks had stalled. In 2014 the group declined to extend, and in June 2015 the roughly fifty-year exclusive arrangement ended: Burberry, Black Label and Blue Label all left the shelves at once, taking the bulk of revenue with them.

President Masahiko Sugiura chose to defend the floor space rather than shrink to fit. He told WWDJAPAN in May 2015 that the company expected to keep “240 to 260 counters, about 70%,” refilling them with Mackintosh London — a business he wanted to grow towards ¥30bn — and with Black Label Crestbridge, launched the same year as a successor line. Shelf space, however, is not brand power. Sales fell from ¥110.9bn in 2014 to ¥97.4bn in 2015, and then to ¥67.6bn in 2016 with an operating loss of ¥8.4bn.

Sanyo Shokai then ran six consecutive years of operating losses, from 2016 through the year ended February 2022, with voluntary redundancy rounds in 2017, 2019 and 2020 — roughly one every three years — as it cut fixed costs. Isao Iwata succeeded Sugiura in January 2017 with a plan built on e-commerce, directly operated stores and own brands; the prescription was sound but late, since the years between Burberry’s first warning and the licence expiry had been spent protecting the star division instead of moving resources. He resigned in December 2019 after four straight loss-making years. His successor Masayuki Nakayama lasted four months.

In 2020 the crisis became a contest for the board. The activist fund RMB Capital ran a proxy fight demanding that the incumbent directors go and an outside professional manager take over; management put up its own outside hire, Shinji Oe, formerly of Mitsui & Co. and Goldwin. RMB’s slate was voted down, but Oe became president in May 2020 — both sides had, in effect, agreed that the company needed an outsider. Sales that year fell to $345.2M (¥38bn), down 45% under COVID-19, which Oe later described as a “shock therapy” that let structural reform be pushed through at speed.

His change was one of measurement. Sanyo Shokai had gone on planning against the memory of ¥140bn, padding sales targets with what he called wishful thinking and stretch goals; Oe made gross margin the primary KPI, aiming at a 55% gross margin and a 10% operating margin, and said plainly that “useless sales can be cut — that may be the courage this takes.” Loss-making brands and excess SKUs went, SANYO GINZA TOWER was sold in 2020, Rubby Group was divested and the Paul Stuart Japanese trademark bought in 2021. Sales of $414.9M (¥58bn) in the year to February 2023 carried a ¥2.2bn operating profit — the first in seven years — and the company has stayed profitable at around ¥60bn since. Oe handed over to Yoshiki Hirabayashi in 2026, leaving a ¥140bn licensee remade as a ¥60bn company selling its own brands.