<h3><strong>Last November, when winter goods were in full swing, sales were negative compared to the previous year&#8230;</strong></h3>
<p>Workman, which had been making great strides, experienced a year-on-year sales decline in November last year. Although sales picked up in December, there were many complaints about out-of-stocks of popular items. What is happening to Workman? &gt;</p>
<p>Workman has completely become one of the major petite brands over the past five years or so, and we feel that it has penetrated the general public more than we imagined. I am the only one among my relatives who works in the clothing and apparel industry, and the rest of them have no connection to or interest in the apparel business, but among them, the number of middle-aged and older people who buy clothes from Workman has been increasing recently, which makes me feel how widespread it has become.</p>
<p>Workman is a company that has been in such a state, but recently it has been difficult to obtain their products. Even if you open the online shopping site, there are many products that are marked &#8220;NEW&#8221; (in other words, newly introduced products) but are sold out, and you do not know when they will be restocked.</p>
<figure id="attachment_291585" class="wp-caption alignnone" style="width: 1024px;" aria-describedby="caption-attachment-291585"><a href="#" data-ident_hash="e7979b60"><img src="https://res.cloudinary.com/fridaydigital/image/private/t_article_image/wpmedia/2023/01/2019011810671-1.jpg" alt=""></a><figcaption id="caption-attachment-291585" class="wp-caption-text">Workman has been making great strides, but&#8230; (Photo: Kyodo News)</figcaption></figure>
<h3><strong> Due to its popularity&#8230;</strong></h3>
<p>Let us now consider why this is the case.</p>
<p>First, the biggest reason is</p>
<p>&#8220;Workman&#8217;s popularity continues to grow.</p>
<p>The first and most important reason is that the popularity of Workman continues to increase. It is only natural that when demand outstrips supply, the product will be out of stock.</p>
<p>The reason why Workman&#8217;s popularity continues to increase is that not only Workman, but also other companies&#8217; work clothes were originally low-priced and highly functional. In addition, in recent years, the designs have become sophisticated enough to withstand casual use. In fact, the price of Workman&#8217;s products is a little cheaper than the regular price of g.u. and about half the price of UNIQLO&#8217;s regular price, so it is natural that the demand for casual use &#8220;Workman is good enough&#8221; will increase if the design is better.</p>
<p>However, even so, the question arises as to why the out-of-stock ratio is so much higher than that of g.u. and UNIQLO. This is because there is a background unique to Workman.</p>
<h3><strong> Workman manufacturers change models every two to five years.</strong></h3>
<p>Since Workman was originally a specialty store, it purchased products from various work clothes manufacturers and sold them in its stores. Although the general public is not familiar with work clothes manufacturers, there are many leading manufacturers such as Jijyudo, XEBEC, and Kurodharma in the market.</p>
<p>However, unlike general casual wear, the speed of fashion &#8220;fads&#8221; is not as fast as that of casual wear. Therefore, a cycle of model changes every two to five years was sufficient, and the sales method was to make enough clothes for two to five years and then sell them. Workman&#8217;s initial statement when it first entered the casual wear market, &#8220;We will sell out without changing models for 2 to 3 years, and change models after selling out,&#8221; is a method unique to the work clothes industry.</p>
<p>On the other hand, while there are various methods in the casual wear industry, the method of making large quantities at the beginning of the period and selling less by the end of the period is one in which UNIQLO excels, and by making large quantities at the beginning of the period, UNIQLO was able to lower the production cost per piece and sell at a lower price.</p>
<p>Although UNIQLO and Workman share the same method of making large quantities and selling fewer items, Workman&#8217;s out-of-stock status is now overwhelmingly higher than UNIQLO&#8217;s. Our guess is that Workman&#8217;s volume of stockouts at the beginning of the period is considerably lower than UNIQLO&#8217;s. At the very least, Workman&#8217;s demand is lower than UNIQLO&#8217;s. We have to assume that it is less, at least in relation to the current volume of demand for Workman.</p>
<div data-friday-nextpage-lead="Franchise stores are 95-96%."></div>
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<h3><strong>95-96% franchise stores</strong></h3>
<p>The next major difference between Workman and other petit-price casual brand stores is the unusually high franchise ratio. The franchise ratio is 95-96% every season, although it fluctuates slightly up and down as the number of stores increases and decreases depending on the season.</p>
<p>Generally speaking, there are few casual stores or fashion brand stores with such a high franchise ratio.</p>
<p>UNIQLO has only 10 franchise stores in Japan out of a total of 809 stores as of the end of FY8/2022. The franchise ratio is only 1.23%. Even at the end of the fiscal year ended August 2008, when the number of franchise stores was the highest in the past five years, there were only 46 out of 813 stores, and the franchise ratio was only 5.66%. Workman&#8217;s franchise ratio is the exact opposite of UNIQLO&#8217;s.</p>
<p>While there are always advantages and disadvantages to any system, we believe that the ratio of franchise stores is too high, which is one of the reasons why it is difficult for additional supplemental investment to be made. This is because the franchise store pays for the cost of purchasing merchandise.</p>
<p>The more additional replenishment purchases a franchise store makes, the more it will have to pay for the purchase, so it will not casually try to replenish additional products just because it has sold out. They would prefer to be able to sell out if possible.</p>
<p>It is also difficult to stock large quantities at the beginning of the season. For example, Workman&#8217;s official online site currently has a system to search store inventories, but when we checked store inventories of new products (products with the NEW mark) that were out of stock, we found that many stores had only one or two of each size of each product in stock (many had no inventory). (There were also many with no stock). Of course, we have not been able to check the in-store inventory of all item numbers because there are a huge number of new product types, but since many franchise stores have only a minimum number of items in stock, it is highly likely that the items are sold out immediately and furthermore, additional replenishment is not being actively carried out.</p>
<p>On the other hand, UNIQLO and g.u. are mostly directly managed stores, so they can easily replenish and add to their stock when items become scarce in their stores. No payment is made by the stores there. In addition, each company&#8217;s chain stores collect shortages among their own brands and ship them to other stores.</p>
<p>This was the case at the chain store where I used to work. If store A had a shortage of a product and store B had an abundant surplus, the headquarters instructed store B to send that product to store A. This would allow store A to sell the product and store B to sell the product. This would allow store A to restore its best-selling products. This is a basic operation for a chain store, but for Workman, which has only franchise stores, this kind of operation is not possible because the owner of each franchise store is different (because purchase payments are incurred), so it is easy for the store to run out of stock.</p>
<figure id="attachment_291586" class="wp-caption alignnone" style="width: 5512px;" aria-describedby="caption-attachment-291586"><a href="#" data-ident_hash="18a7b415"><img src="https://res.cloudinary.com/fridaydigital/image/private/t_article_image/wpmedia/2023/01/aflo_125545478.jpg" alt=""></a><figcaption id="caption-attachment-291586" class="wp-caption-text">The same reason the assortment of products at each Workman store differs greatly. Since the authority for product assortment in franchise stores rests with the stores, it is easy for the assortment to be influenced by the preferences and ideas of each store&#8217;s purchasing manager or owner,&#8221; says Minami (photo: AFRO).</figcaption></figure>
<h3><strong> Reasons why it is difficult to strengthen online shopping&#8230;</strong></h3>
<p>Some people say, &#8220;Well, why don&#8217;t you just strengthen online shopping and sell all your products?</p>
<p>The reason is that most of the physical stores are franchises, while the online shopping is under the jurisdiction of Workman&#8217;s head office. It is easy to imagine that a sharp increase in online sales would cause a backlash from franchise stores.</p>
<p>However, in the case of Workman, a dramatic increase in sales of online shopping, which is under the jurisdiction of the head office, would deprive each franchise store of sales, so Workman cannot easily strengthen online shopping like other apparel chains. Therefore, the company cannot easily strengthen its online shopping business like other apparel chain stores.</p>
<p>Personally, I believe that it is difficult to operate mostly franchised stores in the casual segment.</p>
<p>The recent situation of out-of-stock conditions has some advantages, but also some disadvantages. First, one advantage is that, as with other popular brands, consumers are more likely to perceive that they must buy the product on the day it goes on sale because it is difficult to add to the product once it is sold out. Conversely, a disadvantage is that it may be perceived as &#8220;a hassle to check the arrival date and buy every time,&#8221; and customers may leave.</p>
<p>It is said that Workman is considering some measures to deal with this out-of-stock problem. In any case, Workman&#8217;s dual sales of work clothes and casual wear are still in a transitional stage, so it will be interesting to see how this problem will be resolved in the future.</p>


 Born in 1970. After retiring in 2003, he worked in public relations for a T-shirt apparel manufacturer, as a magazine editor, in sales for a company sponsoring a large exhibition, and in public relations for a fashion college before becoming an independent writer. Currently, he works as a freelance textile industry writer and PR advisor.

 Mitsuhiro Minami

 Workman, which had been making great strides, experienced a year-on-year decline in sales in November last year, just before the start of the winter shopping season. Although sales picked up in December, many customers complained about stock-outs of popular items. What is happening to Workman?

Workman’s Booming Business is Now in Decline Due to these Reasons!

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