The Correlation Between the Collapse of the Apparel Industry and the COVID-19 Pandemic

The COVID-19 pandemic had a massive impact on the global economy. The apparel industry was one of the hardest-hit sectors due to the pandemic. In 2023, the number of bankruptcies in Japan's apparel wholesale and retail industries surged by 30.9% year-on-year to 195 cases, with the company operating the Ray Cassin brand having the largest debt burden among them.

Launched in 1994 as RC Corporation, Ray Cassin enjoyed prosperity, operating approximately 50 stores and generating annual sales of 55 billion yen as of September 2012. However, with the spread of the novel coronavirus infection, sales declined by 24% year-on-year in September 2020, resulting in operating losses.

Facing worsening financial conditions due to the aftermath of COVID-19, Ray Cassin was acquired by Gordon Brothers Japan (GBJ) in March 2023. However, the company was hampered by unpaid taxes amounting to hundreds of millions of yen, eventually leading to a filing for civil rehabilitation proceedings with the court in October. Subsequently, it decided to sell off its business segments and pursue liquidation.

The core target customer base of the Ray Cassin brand, once popular among the "Heisei (平成) generation in their 20s," are now in their 40s and their preferences have shifted. When asked recently, the "Reiwa (令和) generation in their 20s and 30s" responded that the brand had lost its appeal in terms of price and design. The brand appears to have lacked originality and product strength to satisfy diverse tastes. From a supplier's perspective, it was perceived that "rather than being a brand, an era had ended."

COVID-19 dealt a severe blow to the apparel industry. Numerous brands and companies faced significant challenges due to declining customer demand, store closures, and supply chain disruptions. The case of Ray Cassin exemplifies the impact of the pandemic on the apparel industry.

Now that the COVID-19 situation has calmed down, the apparel industry is striving to overcome the crisis and adapt to evolving consumer needs. Strategies such as digitalization, strengthened online sales, and enhanced environmental friendliness and sustainability are being pursued to foster a new leap forward. While COVID-19 has brought about significant transformation in the apparel industry, it is anticipated that this can be leveraged as an opportunity for further growth.