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Zennovation: An East-West Approach to Business Success by Mortimer R. Feinberg, PhD, Adam Taki, Tomio Taki

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CHAPTER 8

Outside Factors Wound Takihyo

The company netted about $100 million during the year of my success with the Stacy Ames brand. Our estimates reflected Takihyo’s recent growth from licensing agreements with Bobbie Brooks, other various start-up divisions, and a general increase in revenue for the following year. We predicted a tremendous increase in sales in early 1973, so we invested about $20 million more into manufacturing and wholesaling overhead. Accordingly, we increased our output for the year. We bought more fabrics and raw materials to provide for what we saw as a growth in demand.

After the oil crisis of 1973, Japanese consumer demand was crippled. Simultaneously, the costs of our material and production commitments continued to grow—a devastating combination of factors. Japanese citizens were no longer buying carpeting and high-fashion items; traditional wood flooring was more economical than our mats, and a woman would wear an old dress a few more times, as long as it was carefully washed. Consumers considered most new goods to be extraneous, luxury expenses. People were more concerned with stocking up on necessities like soap, toilet paper, bottled water, and canned foods. The price of petrol products, including gas and oil, spiked with the announcement of the OPEC embargo in 1973; oil quadrupled to $12 per barrel by 1974. Because Takihyo used petrol products for a number of our fashion lines—such as polyesters and polypropylene in our carpeting division—we ...

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