Apparel maker Renown Inc., which has failed due to impacts of the novel coronavirus outbreak, is at a critical stage in its search for a company that will support its business rehabilitation.
Although the time-honored company has been aiming to choose a rehabilitation sponsor by the end of this month, work to find a company willing to take over its entire operations has hit a brick wall.
There is a possibility that its apparel brands will be sold to different firms, and that Renown — which has a history spanning over 100 years — will end up being liquidated as a result, sources said.
Renown started a court-administered rehabilitation process in May, giving up on rebuilding its operations on its own in the face of faltering sales amid the epidemic. It became the first listed Japanese company to go bankrupt under the weight of the coronavirus crisis, leaving some ¥13.8 billion of debts.
The company was delisted from the Tokyo Stock Exchange on Tuesday. Its stock fetched a final quotation of ¥4 the preceding day.
Work to seek a rehabilitation sponsor is being led by an administrator appointed by a court, and the firm is set to close bidding at the end of this week. Some businesses and investment funds have expressed readiness to back up its turnaround, according to sources with knowledge of the matter.
Renown said Thursday that Sumitomo Mitsui Banking Corp. had set a ¥2 billion credit line for the firm, to help negotiations with a sponsor company proceed smoothly.
But whether sales of Renown products at department stores, a key channel for the company, will pick up remains unclear. The firm’s brand value has also been damaged considerably by the bankruptcy.
“We aim to make a fresh start by coming up with a rehabilitation plan,” a Renown official said.
The company plans to shed about 300 jobs under a voluntary redundancy plan. The number of applicants had failed to reach the target by an initial deadline, so the company has decided to keep the redundancy program in place longer than planned.
Among Renown subsidiaries, menswear maker D’Urban Miyazaki Sewing, based in the city of Nichinan, Miyazaki Prefecture, collapsed on June 5. Its 136 employees are set to be made redundant on July 5.
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