Aderans to Expand $4,400 Wig Shops as Japan Ages

Chief Executive Officer Tadao Otsuki
Chief Executive Officer Tadao Otsuki, said the company aims to have 300 Fontaine Couture brand stores by 2013, up from 50. Photographer: Andrew Malana/Bloomberg

Aderans Holdings Co., Japan’s largest wigmaker, plans to expand its network of luxury female wig stores sixfold as the nation’s growing elderly population spurs demand.

The Tokyo-based company aims to have 300 Fontaine Couture brand stores by 2013, up from 50, Chief Executive Officer Tadao Otsuki said in a June 18 interview. A television advertising campaign featuring actress and former Miss Universe contestant Hisako Manda helped the upscale stores increase customers 20 percent last year, bucking the recession, he said.

The expansion of its female wig stores and increased focus on marketing are part of efforts to turn around the company that’s forecasting its third straight net loss this year. Almost 23 percent of Japan’s 127 million people are 65 years or older, according to government data.

“We provide a comfortable atmosphere for women who hesitate to try wigs in public,” said Noboru Kusama, an Aderans spokesman. Unlike men who wear a single hairpiece daily to hide baldness, female clients buy them more as a fashion accessory, he said.

Aderans advanced 0.8 percent to 1,121 yen at the 3 p.m. close on the Tokyo Stock Exchange. The benchmark Topix index fell 1.5 percent.

$4,400 Wigs

Fontaine Couture’s order-made wigs, like those modeled by Manda, a 1978 Miss Universe contestant, cost 400,000 yen ($4,400) to 500,000 yen on average, Kusama said. That’s as much as 13 times more expensive than off-the-shelf hairpieces, according to the company.

The luxury outlets, usually located in malls and department stores, are similar to beauty salons with private fitting rooms, Kusama said.

Aderans doesn’t break out sales of its upscale Fontaine Couture brand from its Fontaine division, which also includes sales of less expensive lines. Fontaine sales account for about 16 percent of Aderans’s revenue, according to company data.

Even as Fontaine Couture attracted new clients last year, the Fontaine division’s sales fell 9.3 percent, or about half the pace of its Japanese businesses overall, to 9.7 billion yen.

“Aderans is focusing on Fontaine as a domestic growth driver,” Hidekatsu Watanabe, a Mizuho Securities Co. analyst, wrote in a June 10 report. “But I can’t see a sign of recovery.” Watanabe rates the company’s stock “underperform.”

Wigs sold to women account for 64 percent of Japan sales by revenue at Aderans, which also runs a namesake chain of stores aimed at men, and offers hair transplant services for men and women through its Bosley chain in North America.

Aderans aims to increase female wig sales in Japan by 26 percent to 30.8 billion yen by fiscal 2012 from 24.4 billion yen last year. The company forecasts a net loss of 4.9 billion yen in the year ending February, compared with a loss of 9.85 billion yen last year.

Steel Partners Japan Strategic Fund (Offshore) LP is the largest shareholder of Aderans with 27.74 percent stake, according to Bloomberg data. The fund has been investing in the wigmaker since 2004.

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