Shimamura posts record operating profit in May

Japanese apparel group Shimamura has posted group operating profit that has gone up by 30 percent on the year to about 11 billion yen (circa 103 million dollars) in the period comprehended between March and May.

The casual wear retailer's revenue likely climbed 7 percent to around 140 billion yen, highlights ‘Nikkei’. Meanwhile, same-store sales at their 1,300 locations rose 3.8 percent.

As explained by the company and analysts following the stock, this growth was driven by new private-brand products launched for the spring and summer sales season. Though a little pricier than Shimamura's best sellers, these items are perceived as bargains by the brand’s consumers given their high quality. Sales per customer grew 2.8 percent, adds the company.

Market experts point out that detailed inventory management was also key to Shimamura’s record profit during the period, as the retailer managed to narrow down its lineup of basic clothing, focusing on undergarments, and switched from monthly to weekly stock management at stores.

These changes reduced Shimamura’s out-of-season products, helping its gross profit margin to improve from the year-earlier figure of over 31 percent, helping the retailer secure operating profit growth even amid renovations and rising labour costs.

Shimamura is set to announce earnings for the quarter on June, 27.