President Gen Terao took the stage at the financial results briefing for the third quarter of fiscal 2023.
Image: Screenshot by author
“I think it’s an emergency situation.”
At the fiscal year 2023 third quarter results briefing held on November 10th, Bermuda President Gen Terao said this with a grim expression.
Bermuda’s business performance has continued to decline since the start of the coronavirus pandemic, when household demand fell, due to factors such as the end of its mobile phone business and the weaker yen.
On the 10th,Continuing from MaySecond timeAnnounced a downward revision of the fiscal year 2023 earnings forecast. The latest forecast is for sales of 13.3 billion yen (previous forecast of 15.95 billion yen) and net loss of 2 billion yen (previous forecast of 1.25 billion yen).
“Significant reduction in headcount”: Shots sent to 200 employees
There are three main ways to respond to an “emergency” situation.
Source: Bermuda
At the financial results briefing, President Terao stated, “We aim to return to profitability as quickly as possible,” and summarized measures to improve business performance from the following three perspectives.
Improve gross profit margin…We reduced costs and reviewed the design and manufacturing process. We are considering raising prices, but rather than raising prices all at once, we will start with new products and start with appropriate prices.
Reduction of fixed costs… Anticipating a significant decline in sales in the future, we will optimize various expenses, organization, and personnel structure.
Active development of home appliance category…We will focus on the kitchen and air categories and develop products including new ones. In consideration of the weaker yen, brand expansion in Thailand, Singapore, and Malaysia will begin in November.
The second major point is the reduction in fixed costs. Optimization of organizations and personnel systems means what is called “reduction of personnel”. When asked by Business Insider Japan if it was a restructuring, President Terao did not deny it.
Balmuda was “aiming for sales of 20 to 30 billion yen (at the time)” in its IT business, which included entering the mobile phone business, and was ramping up recruitment, saying (President Terao). The number of employees rapidly expanded from 102 in 2018 to 213 in 2022.
Meanwhile, President Terao declares that due to changes in market conditions after the coronavirus, the company is “significantly reducing its workforce this fiscal year.”
Although specific figures are not provided, the chart shows that the company will shrink its business from over 200 employees to around 150 employees in 2023.
Source: Bermuda
Regarding the final size of the personnel reductions, President Terao said, “We have not determined what sales will be in next year’s budget,” but declined to mention specific numbers.“We will approach the project with a staff number that will not aim for 20 billion yen like before.”I answered.
Strengthen our specialty kitchen and air conditioning home appliances and expand our reach into Southeast Asia
“BALMUDA The Plate Pro” has a direct sales price of 42,900 yen (tax included).
Photography: Yutaro Kobayashi
Balmuda is attempting to significantly downsize its business, but the first and second measures are both defensive measures to curb spending.
The third factor, “aggressive development of the home appliances category,” will determine the future direction of the company.
President Terao has expressed a certain degree of confidence in new products, and in particular, the hot plate “BALMUDA The Plate Pro” announced in September is “in very good condition, exceeding expectations,” adding, “It will become an important product from next year onwards. “We have high expectations for this product, even under such difficult circumstances.”
Balmuda will also develop new products and expand sales channels in its specialty categories.
Source: Bermuda
Additionally, on November 6th, the company announced the launch of “BALMUDA The Toaster” and “BALMUDA The Pot” in Thailand, Singapore, and Malaysia. At the financial results briefing, the importance of acquiring foreign currency amidst the weaker yen was emphasized.
However, looking at recent trends, sales in North America and South Korea are also declining, and it cannot be denied that brand power and demand are declining outside of Japan.
Why did Balmuda see an opportunity to win in Southeast Asia even though sales were declining in Japan and South Korea?
President Terao is“(In the three regions), it has been sold in department stores as a parallel import for some time.” “We have been in business negotiations since last year, and we decided to do so because we had good connections.”This suggests that they are expecting demand for Balmuda products, which had not surfaced until now.
2023-11-10 09:40:00
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