TOKYO: Japanese apparel maker Renown Inc. said Friday that it has effectively gone bankrupt with debts totaling 13.8 billion yen, following a slump in sales due to the COVID-19 epidemic.

Renown is the first Japanese listed company that has failed because of the coronavirus crisis. More firms are expected to feel the pinch in coming days.

Subsidiary Renown Agency Inc. filed for civil rehabilitation procedures for the parent as a creditor with Tokyo District Court, which approved the start of the process. Renown will look for a sponsor under its administrator.

Renown will be delisted from the Tokyo Stock Exchange on June 16.

Renown was established in Osaka Prefecture in 1902 as a textile wholesaler. The company became famous with a popular television commercial song and was listed on the TSE's first section in 1969.

It expanded its apparel sales business with the Arnold Palmer and other brands.

It sought to expand through a merger with industry peer D'Urban Inc. in 2004 but struggled domestically due to sluggish sales mainly at department stores.

Renown had been rebuilding its business under the wing of Chinese textile giant Shandong Ruyi since 2010.

Renown logged a consolidated net loss of 6,742 million yen in the 10 months through December 2019, hurt by the October consumption tax rate hike and the warm winter season. The company had also posted a net loss the previous fiscal year.

The coronavirus outbreak dealt an additional blow, causing a plunge in store visitors and temporary shutdowns of department stores. Renown's sales in April this year fell 81.0 pct on a same-store basis from a year earlier.

In late March, Renown saw its proposal to reappoint its president and chairman rejected by Shandong Ruyi at a general shareholders meeting.

JIJI Press