Hirota Group Holdings has transferred its subsidiary Awaya Sohei, a traditional Japanese sweets manufacturer, to its president Koumei Sato for a nominal fee to streamline its operations amid financial challenges.

Target Information

Hirota Group Holdings Co., Ltd., known for its confectionery retail chain 'Hirota', has divested its subsidiary Awaya Sohei, a manufacturer and seller of traditional Japanese sweets (Wagashi) based in Nerima, Tokyo. Awaya Sohei was acquired by Hirota in 2018 as part of its expansion into diverse confectionery offerings. However, due to rising raw material and utility costs, the company's performance has significantly declined, prompting Hirota to reassess its business portfolio and ultimately decide to relinquish this subsidiary.

As of March 2025, Awaya Sohei reported revenues of 261 million yen, an operating loss of 30 million yen, and a net asset deficit of 52 million yen. The decision to transfer ownership is part of a strategic move to streamline operations and focus on more profitable ventures.

Industry Overview in Japan

The Japanese confectionery industry is characterized by its rich cultural heritage, with a variety of traditional and modern sweets. The sector has historically benefited from both domestic consumption and interna