[ITmedia Business Online] Why Workman can increase profits by 50% even if he lowers the price of work clothes by 1,000 yen Revamps his main business by responding to complaints that ``It's difficult to enter the store wearing work clothes''

Workman is currently rebuilding its mainstay workwear business. One of the efforts was to lower the price of work clothes, which used to be sold at 4,400 yen for a top and bottom set. Although the price was lowered to 3,400 yen, profits increased by about 50%. Why were they able to reduce prices by 1,000 yen and increase profits at the same time?

Reducing prices and increasing profits by reviewing procurement methods

What made the price reduction possible was a review of procurement methods. Previously, the company had outsourced manufacturing to factories in China and Myanmar, but it has now switched to ``processing trade'' in which materials such as fabrics and zippers are procured in China and supplied free of charge to garment factories in Southeast Asia.

As a result, the factory only had to pay for the labor involved in sewing, cutting procurement costs by eliminating the need for intermediaries. As a result of lowering the cost of goods by about 30%, the company says it has increased profits by about 50% while lowering the selling price by 1,000 yen.

Workman has been promoting the "Work Resilience Plan" since April 2024. In addition to low-priced, high-performance workwear, the company is positioning high-priced products and products that protect against heat and cold as ``resilient products,'' and is rebuilding its workwear business. The company aims for sales of 71 billion yen in 2027.

Behind this is the issue that has arisen due to the strong performance of products for general customers. While the number of general customers visiting the store has increased by increasing the selection of functional casual wear, existing customers have begun to voice comments such as ``It's difficult to enter the store in work clothes,'' and ``It's difficult to shop even if you come to buy work clothes.''

At a strategy presentation held on October 7, Managing Director Tetsuo Tsuchiya enthusiastically stated, ``We want to generate sales of 71 billion yen with products that are not available at other workwear stores or home centers, and are definitely sold only at Workman.'' We aim to grow the workwear business by expanding our unique products.