When it comes to Japanese retail billionaires, the first name that springs to mind might be Tadashi Yanai, the entrepreneur behind the Uniqlo brand and the nation’s richest man.
But there’s another founder who’s drawing attention as one of his biggest companies transforms in the country.
Yoshio Tsuchiya’s Workman Co. has expanded beyond its roots as a maker of drab uniforms for laborers into low-cost but functional sportswear and outdoor gear. The evolution has won praise from investors, analysts and even Fast Retailing Co.’s Yanai, who says the company has created a “new market,” although other observers question whether the positive momentum has reached its limit.
Workman’s shares have more than quadrupled since the start of 2018, despite paring some of their gains recently. That boosted Tsuchiya and his family’s stake in the company alone to about $4.5 billion, according to the Bloomberg Billionaires Index. For one analyst, the retailer has the potential to really take off when the country gets clear of the Covid-19 pandemic.
“It’s one of the more exciting stories in Japanese retail” once things get back to normal, said Ruhell Amin, global head of retail equity research at William O’Neil & Co. in London.
Tsuchiya opened Workman’s first store in 1979 when he was in his late 40s. The company specialized in work clothing for construction laborers, a booming business in the country’s bubble economy of the 1980s.
In 2016, Workman moved into low-cost outdoor gear before opening its first WORKMAN Plus store two years later to focus on sports and outdoor clothing. The company had 632 regular stores and 269 WORKMAN Plus shops across Japan as of March 10, often in areas where blue-collar workers live.
One popular product is a waterproof jacket that costs 3,900 yen ($36), much lower than comparable offerings by other companies. A “climb light jacket” from The North Face, for example, retails for 33,000 yen.
“Because our clothes were originally designed to suit workers, they weren’t inferior to sportswear in functionality, and most importantly, they could be made at cheap prices,” Tetsuo Tsuchiya, a family member and senior managing director at Workman, said in an interview with ITmedia Business Online in January. “We realized that was Workman’s strength.”
Richard Kaye, a portfolio manager at Comgest Asset Management Japan Ltd., which owns Workman shares, said the quality of the company’s products can be better than more expensive brands because of its established supply chain.
The apparel maker boasts “high performance at one-half to one-third the cost of famous brands,” Ryozo Minagawa, a senior analyst at SMBC Nikko Securities Inc. in Tokyo, wrote in a November note. It has “no competition” in the cheap sportswear segment, he wrote.