Strategy in TECH...
“The bigger they are, the harder they fall.” This old saying will likely resonate with many Sharp Corp. employees who are about to learn that the company is planning major job cuts – far greater than originally rumored – as it tries to turn around its struggling operations and cut its losses. The company’s management – whether voluntarily or forced by their banks – seem to be finally ready to take the drastic steps necessary to make a meaningful change at the company.
Nortek Inc. released their fiscal first quarter results this week and they were mixed at best. The company showed a sales increase to $572.7 million, up 4.5% over the $547.8 million booked in the first quarter of 2014. However, the company saw its net losses increase from $8.6 million last year to $13.9 million in the quarter this year. And when it comes to Nortek’s AV businesses, sales in the quarter declined another 9.5%, although the loss attributable to this segment did show some improvement to less of a loss.
JVC Kenwood Corp. released a summary of results for their fiscal year 2015, the year that ended March 31, 2015, and we continue to see positive profit results from their rather dramatic company-wide restructuring that had them abandoning many consumer categories and refocusing on more commercial enterprises. But we also see a continued and persistent slide in sales that shows no sign of slowing down.
If you’ve been holding your breath, waiting to see what is going to happen to troubled Japanese giant Sharp Corp., you can now relax and exhale. The first significant hurdle the company faced on their race to survival appears to be cleared. Media in Japan is now reporting that Sharp’s two banks will support it through a restructuring with a ¥200 billion convertible loan.
In a new report out of Japan today, Sharp Corp. is said to be preparing to report a loss of “more than 200 billion yen” or about $1.66 billion, when they finally release their fiscal year-end results. This report is based on unnamed sources and appeared in the Nikkei.
Toshiba Corp. announced in Japan that it will appoint a committee to investigate what it calls “possible problems” with its accounting. Investors in Japan responded by hitting the company’s stock with its largest one-day drop in more than a year – dropping the value of its stock almost 5%.
In just the last two days, Japanese and U.S. press outlets are releasing a slew of stories of Sharp Corp.’s impending doom in the form of a restructuring announcement that isn’t expected to be officially released until May. Nonetheless, multiple reports have emerged from a wide range of media sources including the Nikkei and Reuters news services with a relatively wide range of estimated job cuts – all citing unnamed sources.
In a new report out of Japan, Sony’s TV business is said to be expected to report an operating profit this fiscal year – its first after ten years of losing money. Due to an improved situation in the U.S. market, the report credits the turnaround in Sony’s U.S. results largely as a function of its tightened partnership with retailer Best Buy.
We’ve been reporting for a while now on the epic survival struggles of some of this industry’s biggest brand names in Japan…most recently Sharp Corp. Some of the changes we’re seeing now were unforeseeable even 24-36 months ago – Sony spinning off divisions, JVC Kenwood pulling out of the consumer business, Pioneer first shutting down A/V, then selling that division to Onkyo, Toshiba pulling out of TV biz, Panasonic dropping consumer business, and on and on…
Now a reporter for the respected Bloomberg View asks, “…why Sharp should still be in business?”
