Japanese collectibles retailer Mandarake Inc. reported a sharp decline in quarterly profits even as sales increased, raising questions about the company’s cost management during its expansion efforts.
The Tokyo-based operator of manga and anime merchandise stores posted net income of ¥812 million ($5.5 million) for the nine months ended June, down 29.3% from the previous year. Operating profit fell 22.3% to ¥1.33 billion ($9.1 million), while sales rose 4.2% to ¥11.3 billion ($76.9 million).
The company attributed the profit decline to increased selling, general and administrative expenses, particularly provisions for executive retirement benefits following implementation of new compensation rules. Mandarake said it made a one-time provision to accumulate retirement funds under the new system.
Revenue growth came from the opening of new store “Mandarake PUCK1,” expansion on online marketplace Mercari Shops, and stronger web sales and auction activities. However, the modest sales increase failed to offset rising costs, highlighting operational challenges as the niche retailer expands its footprint.
The company projects full-year sales of ¥15 billion ($102.1 million), up 3.8% from the prior year, with net profit forecast at ¥1.5 billion ($10.2 million), representing 8.9% growth. Based on current progress rates, Mandarake has achieved 75% of its annual sales target but only 54% of its profit goal.
Founded in 1980, Mandarake specializes in buying and selling vintage manga, anime collectibles, toys and related merchandise through both physical stores and online platforms. The company’s shares have declined approximately 34% over the past year, reflecting investor concerns about the business model’s scalability.
