Business / Corporate

Otsuka Kagu plans luxury futon sales campaign in Chinese market to turn fortunes around


Furniture retailer Otsuka Kagu Ltd. will accelerate efforts to develop sales channels in China to achieve a turnaround, President Kumiko Otsuka has said.

In a recent interview, Otsuka said her company will start with luxury futon, with down feathers, in a fresh sales blitz in the world’s most populous country.

“We started developing unique futon more than 30 years ago. Chinese people visiting Japan love the products a lot and take them home,” said the daughter of the company’s founder.

Otsuka said the company has finished the major phase of its planned streamlining of domestic outlets.

“From now, we’ll spend time and money to improve the quality” of the company’s products and services, she said.

In February, Otsuka Kagu decided to raise ¥3.8 billion by issuing new shares in a third-party allotment scheme to improve its financial health. But the company fell short of the target by ¥1.2 billion.

Otsuka said the result of the fund procurement does not affect its Chinese operations, which do not require much investment.

Still, she added that the latest financing activity was not the last financial arrangement planned by her company, suggesting the possibility of further fund procurement.

In China, Otsuka Kagu will initially sell its futon through local distributors at shopping malls run by its partner, Beijing Easyhome Yundi Huixin Retail Chain Co.

Given that the Japanese firm once sold 10,000 sets of futon annually in its domestic market, the company will be able to reach a similar level in China, Otsuka said.

With luxury futon costing ¥100,000 per set, Chinese sales could reach several billion yen, she said.

Otsuka Kagu suffered year-on-year declines in sales for seven straight months through June on a same-store basis.

The president stressed the importance of taking advantage of an expected surge in demand ahead of the October consumption tax hike from 8 percent to 10 percent.

“We would be in trouble if we failed to achieve year-on-year growth during the period” preceding the tax increase, she said.

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