IZAWA TOWEL CO.,LTD. (365A) Stock Price

Izawa Towel is a fabless manufacturer specializing in the planning, development, and sales of towels as everyday products. The company operates primarily through its own brand "Towel Laboratory," offering direct-to-consumer sales via e-commerce, retail products, and character merchandise. With a focus on consumer satisfaction and usability, the company aims to establish a standard where customers can confidently purchase its towels without hesitation.

The company's primary sales channels include convenience stores, drugstores, discount stores, home centers, general merchandise supermarkets, e-commerce retailers, and toy manufacturers, with transactions centered on everyday household needs. Revenue composition breaks down as follows for the fiscal year ending February 2025: ODM production accounts for approximately 56.6%, character IP products for approximately 26.5%, and e-commerce sales for approximately 16.9%, with ODM production serving as the core revenue driver.

The company focuses on three main business areas: ODM production (a model where design through manufacturing is conducted with contract manufacturers), character IP products, and e-commerce sales. By maintaining in-house research and development and planning capabilities while outsourcing manufacturing to large-scale overseas factories, the company achieves both cost competitiveness and flexible production. It leverages sales data, patents, and collaborative research to enhance product quality.

Izawa Towel operates under the vision of "creating global standards for towels and establishing a presence in the world market." The company has identified three growth channels: ODM (Original Design Manufacturing) production, character IP products, and e-commerce sales. As of February 2025, revenue is composed of ODM at approximately 56.6% (¥5,557,558 thousand), character IP products at approximately 26.5% (¥2,604,893 thousand), and e-commerce at approximately 16.9% (¥1,662,908 thousand). By strengthening these three pillars, the company aims to achieve medium-term business expansion and improved profitability, with a focus on recovering and growing operating profit before goodwill amortization to enhance corporate and shareholder value (reference: prior period ¥1,304,609 thousand → current period ¥780,073 thousand).

The company concentrates resources on product planning, research and development, and brand strengthening as priority investment areas. Centered on its proprietary brand "Towel Laboratory," the company designs products with emphasis on consumer comfort and differentiates through patents, collaborative research, and sales data utilization. For production, the company adopts a fabless model by outsourcing to large-scale overseas factories. It manages foreign exchange risk through hedging instruments such as forward contracts while maintaining price competitiveness through operational efficiency and economies of scale.

For new market development, the company is clearly prioritizing e-commerce expansion and deeper penetration of the character IP market. The character IP market is valued at approximately ¥2.65 trillion, and the global bath towel market at approximately ¥1.57 trillion. The company plans to expand direct e-commerce sales to capture consumer demand while broadening distribution channels through toy manufacturers, amusement facilities, and large retailers with private brands. Additionally, the company will diversify production locations across China, Vietnam, India, and other countries to increase supply flexibility and reduce risk through multi-site sourcing and agile production switching.

Regarding technological innovation, the company is developing high-value-added towels with enhanced functionality and antimicrobial properties, strengthening products through patent acquisition and collaborative research with external institutions, and advancing product planning through e-commerce platform improvements and data analytics. The company is also investing in strengthened internal governance and sustainable business practices, aiming to build long-term competitive advantage through material selection and human capital development.