Shimano relies on its fishing division as group sales dive 29%
Shimano’s fishing division provided a crumb of comfort for the group last year.
The Japanese giant’s beleaguered bicycle division, which is facing a lawsuit in the US for alleged defective products, saw its net sales dip 29.5% from the previous year to 364,679m yen. Operating income also fell by half (50.5%) to 83,653m. Its fishing division fared better, registering a decline of just 1.6% to 109,225m in a sector that has seen a number of major suppliers post double digit decreases in sales. Overall the group saw its revenue nosedive 24.6% to 474,362 compared to 628,909m.
In its overall review of the business for the year ending December 31st, Shimano said: “Tight monetary policies to tame inflation that had been adopted mainly in Europe and the US were largely projected to end, but the pace of global economic recovery remained at a standstill as turmoil in Ukraine and the Middle East and a slowdown in economic recovery in China exerted downward pressure on the economy.”
It added that with changes in global consumer trends, demand for fishing tackle showed signs of cooling, which led to an increase in inventories which exerted no small effect on sales.
It described sales of tackle in its domestic Japanese market as ‘sluggish’ with leisure options increasing for consumers following COVID.
The North American market recovered from a weak start to deliver a strong result, helped by demand for new products. Sales were described as favourable in the Chinese market at the start of the year, but became lacklustre due to an adjustment of market inventories.
Favourable fishing conditions and good weather delivered strong sales in Australia.
Shimano reported that the new STRADIC spinning reels and the highest-end World Shaula lure rods (pictured) were well received and order-taking for the Vanquish and other high-priced products were brisk.
In its forecast for the future, Shimano is cautious. “Soaring resource prices and stagnation of logistics stemming from geopolitical risks, such as the prolongation of the situation in Ukraine and the growing tension in the Middle East, may disrupt global supply chains and put further downward pressure on the economy,” it told investors.
“In addition, the outcomes of elections scheduled in major countries and regions in 2024 and changes in interest rate policies in various countries may affect the economy.
“While monetary tightening adopted mainly in Europe and the US are showing signs of easing, it is expected in Europe that personal consumption will recover thanks to declining interest rates and an improvement in the employment environment, leading to a moderate recovery. Meanwhile, there is concern that the presidential election may influence the economy.”
It added that it expected a moderate economic recovery in Japan thanks to wage rises and government policies which are expected to support a return to normal of the economy.
For this financial year, Shimano is predicting sales of 420,000m yen – an 11.5% reduction compared to 2023.