Japanese textile manufacturer Gunze will shutter four factories and two distribution centers across Japan as part of a sweeping restructuring of its struggling apparel division, the company announced Wednesday.
The closures reflect mounting pressure on the 127-year-old Osaka-based company as Japan’s underwear market continues to contract. Production will be moved to affiliates in Thailand and Vietnam, underscoring the broader shift of Japanese manufacturers toward lower-cost overseas operations.
The restructuring generated a ¥3.4 billion ($23 million) extraordinary loss during Gunze’s April-June quarter, weighing on consolidated results. The company has been grappling with persistent weakness in its core underwear business, which faces declining domestic demand as consumer preferences shift and competition intensifies.
Japanese textile companies have been struggling in recent years due to intensifying competition with Chinese and other rivals, with several firms exiting the sector entirely. Unitika announced its complete withdrawal from textiles late last year.
Gunze’s difficulties in apparel stand in contrast to its medical materials division, where the company has been investing heavily. The firm committed ¥3.5 billion to expand medical device production facilities in Kyoto, targeting growth in surgical products where demand remains robust.
The factory closures signal Gunze’s recognition that its traditional textile operations can no longer compete profitably from Japan’s high-cost manufacturing base.
