MUSIC SCHOOLS AND FUNERAL HOMES ARE GOING BANKRUPT IN JAPAN

The COVID-19 pandemic does not spare even the technologically advanced Japanese business. According to the TSR (Tokyo Shoko Research) company research, because of the restrictions, caused by the spread of coronavirus infection, 141 companies of the country went bankrupt in February. By the end of May, as the Japanese analysts expect, the number of cases will only increase.

The experts note that tourism and catering became the main sector, affected by the systemic crisis. Similar processes are taking place in other countries. However, as it was noted by the researchers of TSR, the influence of negative factors spreads much further than it was previously expected. In particular, the damage is caused to the enterprises, the activities of which seemed not to be directly related to the problems of the social isolation and anti-epidemic measures.

Construction companies, music schools and funeral homes turned out to be on the verge of bankruptcy.

In addition to the pandemic factor, which is obvious even to the ordinary citizens, the increase in the number of bankruptcies is affected by increased consumption taxes and labor shortage that took place last year.

The researchers cite data that only in April 2020, 743 companies went bankrupt in the country, for 71 of which the viral infection became the key factor. The total growth of bankruptcies, compared to the same period of the last year, has grown by 15% (in April 2019, 645 enterprises became bankrupt in Japan).

In response to the crisis, the government of Shinzo Abe declared a state of emergency last month and launched a comprehensive package of measures to stimulate the economy, accounting for about 20% of the total production.

This included various support measures, including cash grants to the companies and individuals. However, the experts from TSR note that now the speed of implementation of planned activities is becoming an important task for the state. Many companies of the country are suffering from the expenses that are spent to pay wages and rents, as well as the utility bills. At the same time, the sales of many entrepreneurs are catastrophically reduced.

Teikoku Databank, a credit rating company, reports that the majority of the bankrupt companies are the enterprises of the hotel business. The restaurants and other companies, operating in the catering market, are in the second place. The third place is occupied by the companies that produce women's clothing and shoes.

About a third of all the bankruptcies take place ii the companies, located in Tokyo and in the suburbs of Tokyo.

Since the restrictive measures in the country (toughening border controls, asking residents to stay at home) have been extended until the end of May, the experts expect further growth in the number of bankruptcies.