Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

<ul>
<li>Adastria’s “5th CHANGE” outlines a strategic pivot from specialty retail to a platform model aimed at scaling across brands, categories, and geographies while navigating domestic headwinds and evolving consumer behaviors.</li>
<li>While <a href="https://www.smartkarma.com/entities/adastria-co-ltd" target="_blank" data-smartkarma-citation="entities:11895:1" rel="noopener">Adastria Co Ltd (2685 JP)</a>’s narrative emphasizes transformation, actual targets for user growth and GMV expansion appear modest, suggesting limited operational changes.</li>
<li>Despite mixed views on the mid-term plan, we remain optimistic on Adastria. Gross margin normalization could drive meaningful OP upside, potentially surpassing mid-term plan targets.</li>
</ul>


Adastria’s “5th CHANGE” outlines a strategic pivot from specialty retail to a platform model aimed at scaling across brands, categories, and geographies while navigating domestic headwinds and evolving consumer behaviors.
While Adastria Co Ltd (2685 JP)’s narrative emphasizes transformation, actual targets for user growth and GMV expansion appear modest, suggesting limited operational changes.
Despite mixed views on the mid-term plan, we remain optimistic on Adastria. Gross margin normalization could drive meaningful OP upside, potentially surpassing mid-term plan targets.


Adastria: Cautious on the Platform Narrative, But Optimistic on Margins and Valuation Rebound

Expert on Japan Retail and Consumer Markets, JapanConsuming

Michael Causton

Expert on Japan Retail and Consumer Markets

Real Insight on Japanese Consumer Markets

JapanConsuming

JapanConsuming is a specialist research firm producing intelligence on Japanese retail and consumer markets. Founded in 2000, JapanConsuming has become the leading provider of insights on Japanese retailers and consumer trends to retailers, brands, government agencies and investors. As well as a highly regarded monthly report on the market, JapanConsuming produces in-depth reports on retail sectors, seminars on key trends and telephone consulting to investors on trends and retailers.

JapanConsuming was founded by Michael Causton and Roy Larke. 

<ul>
<li>Adastria (soon to be And ST) is Japan’s biggest multi-chain clothing retailer and fourth largest overall.  </li>
<li>As well as investing in core brands like Global Work, the former wholesaler is now expanding through new segments – including Forever 21 despite its US bankruptcy</li>
<li>In a sign of further diversification, it will now move into the very buoyant outdoor market having just acquired the Asian rights to UK outdoor brand, Karrimor.</li>
</ul>


Adastria (soon to be And ST) is Japan’s biggest multi-chain clothing retailer and fourth largest overall.  
As well as investing in core brands like Global Work, the former wholesaler is now expanding through new segments – including Forever 21 despite its US bankruptcy
In a sign of further diversification, it will now move into the very buoyant outdoor market having just acquired the Asian rights to UK outdoor brand, Karrimor.


Adastria: ¥500 Billion Through New Brands – Signs UK’s Karrimor

Thematic (Sector/Industry)

<ul>
<li>Consumer distribution has been transformed since 2020 through accelerated concentration of market share. While some has come about through organic growth, the real drivers have been M&amp;A and MBOs. </li>
<li>The result is a realignment of the retail leader board as companies like PPI, Welcia and Trial buy their way to the top, while others, notably Seven &amp; I, shrink.</li>
<li>Here we identify the retail leaders in driving consolidation going forward, and the intensifying pressure on both smaller retailers and the wholesalers that supply them.</li>
</ul>


Consumer distribution has been transformed since 2020 through accelerated concentration of market share. While some has come about through organic growth, the real drivers have been M&amp;A and MBOs. 
The result is a realignment of the retail leader board as companies like PPI, Welcia and Trial buy their way to the top, while others, notably Seven &amp; I, shrink.
Here we identify the retail leaders in driving consolidation going forward, and the intensifying pressure on both smaller retailers and the wholesalers that supply them.


[Japan M&A] Who Owns Who: The Growing Concentration of Power in Japanese Consumer Markets

Honeys Holdings Co., Ltd. / Equity Bottom-Up

<ul>
<li>Low cost apparel retailers have enjoyed a significant uptick in the past few years as consumers look to polarise their spending further between cheaper basics and luxury treats. </li>
<li>But the real change is in improving profitability. One the biggest beneficiaries has been Honeys, a low cost womenswear retailer that has seen a revival in the past few years.</li>
<li>Operating profit has tripled since 2018. Can it last? Work on creating its own low cost manufacturing base suggests it can.</li>
</ul>


Low cost apparel retailers have enjoyed a significant uptick in the past few years as consumers look to polarise their spending further between cheaper basics and luxury treats. 
But the real change is in improving profitability. One the biggest beneficiaries has been Honeys, a low cost womenswear retailer that has seen a revival in the past few years.
Operating profit has tripled since 2018. Can it last? Work on creating its own low cost manufacturing base suggests it can.


<ul>
<li>Ryohin Keikaku's biggest weakness is its unwieldy and expensive supply chains, with hundreds of suppliers across its three main categories of household, apparel and food.</li>
<li>The Muji operator just acquired a large team from one of its principle clothing supply partners, Mitsubishi, to finally streamline its supply chains and improve cost performance in clothing. </li>
<li>This should have a positive impact on its cost of goods, margins and inventory levels, allowing for quicker responses to trends at a lower price at home and overseas.</li>
</ul>


Ryohin Keikaku's biggest weakness is its unwieldy and expensive supply chains, with hundreds of suppliers across its three main categories of household, apparel and food.
The Muji operator just acquired a large team from one of its principle clothing supply partners, Mitsubishi, to finally streamline its supply chains and improve cost performance in clothing. 
This should have a positive impact on its cost of goods, margins and inventory levels, allowing for quicker responses to trends at a lower price at home and overseas.


Ryohin Keikaku: Finally Fixing Its Biggest Weakness?

Japan

Adastria Co., Ltd. operates a chain of clothing stores in Japan. The Company also operates stores in China, Taiwan, Hong Kong and Korea.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Adastria Co Ltd (2685 JP)

Adastria: Cautious on the Platform Narrative, But Optimistic on Margins and Valuation Rebound

Adastria shifts from specialty retail to platform model, with modest growth targets but potential for operational improvement and profit upside.

Oshadhi Kumarasiri

Adastria: ¥500 Billion Through New Brands – Signs UK’s Karrimor

Japan's largest clothing retailer, Adastria, is expanding into new segments like outdoor market with acquisitions of brands like Karrimor and even...

Michael Causton

[Japan M&A] Who Owns Who: The Growing Concentration of Power in Japanese Consumer Markets

Consumer distribution has shifted post-2020, with market concentration driven by M&A and MBOs. We identify the leaders of this consolidation,...

Michael Causton

Sweet Honeys: A Profit Machine

Low cost apparel retailers are seeing increased profitability, with Honeys leading the way through a revival and focus on creating a low cost...

Michael Causton

Ryohin Keikaku: Finally Fixing Its Biggest Weakness?

Muji operator Ryohin Keikaku looks set to improve its supply chains and cost performance in clothing by acquiring a team from Mitsubishi, leading...

Michael Causton

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Adastria: Cautious on the Platform Narrative, But Optimistic on Margins and Valuation Rebound

​Adastria shifts from specialty retail to platform model, with modest growth targets but potential for operational improvement and profit upside.

Oshadhi Kumarasiri

Adastria: ¥500 Billion Through New Brands – Signs UK’s Karrimor

​Japan's largest clothing retailer, Adastria, is expanding into new segments like outdoor market with acquisitions of brands like Karrimor and even...

Michael Causton

[Japan M&A] Who Owns Who: The Growing Concentration of Power in Japanese Consumer Markets

​Consumer distribution has shifted post-2020, with market concentration driven by M&A and MBOs. We identify the leaders of this consolidation,...

Michael Causton

Sweet Honeys: A Profit Machine

​Low cost apparel retailers are seeing increased profitability, with Honeys leading the way through a revival and focus on creating a low cost...

Michael Causton

Ryohin Keikaku: Finally Fixing Its Biggest Weakness?

​Muji operator Ryohin Keikaku looks set to improve its supply chains and cost performance in clothing by acquiring a team from Mitsubishi, leading...

Michael Causton

Adastria shifts from specialty retail to platform model, with modest growth targets but potential for operational improvement and profit upside.

Japan's largest clothing retailer, Adastria, is expanding into new segments like outdoor market with acquisitions of brands like Karrimor and even...

Consumer distribution has shifted post-2020, with market concentration driven by M&A and MBOs. We identify the leaders of this consolidation,...

Low cost apparel retailers are seeing increased profitability, with Honeys leading the way through a revival and focus on creating a low cost...

Muji operator Ryohin Keikaku looks set to improve its supply chains and cost performance in clothing by acquiring a team from Mitsubishi, leading...