BANKRUPTCY BY JAPANESE: THE RENOWN COMPANY IS SINKING IN THE BANKRUPTCY PROCEEDINGS

On May 15, 2020, the Japanese clothing manufacturer Renown filed for bankruptcy in the court. The district court of the capital accepted the application on the same day. This is the first Japanese company to be reorganized during the COVID-19 coronavirus pandemic. However, the bankruptcy has been inevitable for quite a long time, and the retailers, closing the doors of the stores, became the final chord of more than a century of the history of company.

The sources report that the lawsuit was filed in accordance with the Civil Rehabilitation Act of Japan not by the parent company itself, but by its subsidiary, Renown Agency. The documents indicated the debt obligations in the amount of 13.9 billion yen ($ 130 million). It is expected that a company, the controlling stake of which is owned by a Chinese holding Shandong Ruyi, will take about a month time to choose a person to carry out the procedures, necessary for bankruptcy.

The shares of Renown are likely to be excluded from the first section of the Tokyo Stock Exchange.

Previously, the company was considered as one of the largest clothing manufacturers in the world. It was founded in 1902 and gained fame by such brands as D'urban (French actor Alain Delon was shot in men's suits for this brand) and Arnold Palmer (with the logo of a golf umbrella).

In the mid-1990s, Renown experienced its greatest success, but subsequently, as the industry went online, it began to decline. In 2013, the company was bought by the Chinese investment group Ruyi (Shandong Ruyi Technology Group), also working in the clothing and textile sectors. However, the sales in the Celestial market were not successful for the enterprise and resulted in millions of losses ($ 53.2 million), which the company has reported about at the end of last year.

As it was noted by some Japanese experts, the company was ruined by a "friendly" management style.

In 1994, the president of the company officially resigned in order not to lose his face after he had faced with the company's low income in the late 1980s, when the country's economy was in crisis. However, instead of completely leaving the leadership, the former president actually appointed his partner as the head of the company. It led to the situation in which the head of a department acted as president of the company.

Insecure management style, as the informed sources note, was also manifested in the company's relations with the retail outlets. The Renown brand relied on their own strategies so much (including the location of sales areas, opening new stores) that have lost its own ones.

The fact that the bankruptcy lawsuit was filed not by the company itself, but by its subsidiary, indicates a bewildered management in this situation.

The irony of the situation is that the company was named Renown in honor of the legendary unsinkable British cruiser, on the board of which Prince Edward visited Japan in 1922. The ship successfully survived two world wars. The same cannot be said about the commercial enterprise, which collapsed as a result of the fact that for a quarter of a century, there was no successful leader in it.