Target Company Information

Advantage Partners, LLC (referred to as ‘AP’) has announced the transfer of all shares of Credge Co., Ltd. (referred to as ‘Credge’) to MIT Partners No. 2 Limited Liability Company, a subsidiary of MIT Corporate Advisory Services (referred to as ‘MIT’). Credge was established in August 2007 following a management buyout (MBO) which allowed AP to acquire the main apparel business segment of its predecessor, Joe International Co., Ltd. Following the MBO, Credge has modernized its management and established a nationwide sales structure while preserving its core cultural attributes of creativity and cutting-edge innovation.

In recent years, Credge has focused on expanding its brand portfolio and optimizing its operations and promotion strategies to meet the growth of new channels such as station buildings, shopping centers, and e-commerce. This strategic approach has resulted in a strong brand portfolio, highlighted by well-known brands such as Lip Service, and a significant increase in store numbers—an 80% growth in the last six years—across various channels including station buildings, shopping centers, outlets, and overseas markets. Furthermore, Credge has positioned itself as a pioneer in the e-commerce sector, achieving considerable growth.

Industry Overview in Japan

The Japanese fashion industry is a key sector within the global market, characterized by its innovation and adaptability. Japan is renowned for its unique fashion trends that often blend tradition and modernity, attracting both domestic and international consumers. The industry has seen a notable shift towards sustainability and ethical production, with brands increasingly adopting eco-friendly practices to meet consumer demand for responsible fashion.

In recent years, e-commerce has become a dominant channel for fashion retail in Japan, accelerated by the COVID-19 pandemic. Online shopping platforms have gained considerable traction, prompting traditional retailers to enhance their digital presence. This growth in e-commerce is supported by a tech-savvy consumer base that values convenience, leading to increased investments in logistics and supply chain management to improve delivery efficiency.

Furthermore, Japanese consumers are becoming increasingly brand-conscious, leading to a high demand for quality and exclusivity. The market is witnessing a surge in boutique and niche brands catering to specific demographics, alongside major fashion houses. This trend has encouraged collaboration between brands and a focus on multi-channel retail strategies, allowing companies to reach wider audiences effectively.

Despite challenges such as market saturation and changing consumer preferences, the Japanese fashion industry remains resilient, with companies focusing on innovation and customer engagement to stay competitive. The continued growth in the e-commerce sector, combined with a strong retail infrastructure, presents opportunities for further expansion and investment in this vibrant market.

Rationale Behind the Deal

The decision to transfer shares of Credge is strategic, as it aims to leverage MIT’s logistics and production capabilities to enhance Credge's operational strength for multi-channel and multi-brand expansion. As Credge seeks to build upon its established brand portfolio and operations, MIT's infrastructure will play a critical role in supporting the company's growth objectives. This partnership is viewed as the optimal choice to foster further development of Credge in the highly competitive fashion landscape.

Additionally, this transaction underscores AP's commitment to actively pursue investments in the fashion sector, capitalizing on its experience to maximize potential growth. The integration with MIT is expected to accelerate Credge’s expansion plans, particularly in diversifying its revenue streams across different retail platforms.

Investor Information

MIT Corporate Advisory Services is a leading advisory firm based in Tokyo, specializing in business revitalization, transaction advisory, and fund management. Founded and led by President Akihiro Matsumoto, MIT is dedicated to providing comprehensive support to companies in need of strategic guidance and operational improvement. With a proven track record in the market, MIT has garnered a reputation for facilitating successful mergers, acquisitions, and investments.

The firm operates from its headquarters in Shibuya, Tokyo, and has cultivated a diverse portfolio of clients, ensuring effective strategies tailored to unique business challenges. With a total capital of 50.5 million yen, MIT continues to explore innovative solutions to enhance its clients' operational efficiencies and market positions.

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This strategic acquisition of Credge by MIT represents a promising investment opportunity in the Japanese fashion market. The decision to strengthen Credge's operations through MIT’s logistics and production capabilities aligns with current industry trends, emphasizing the importance of multi-channel marketing and brand diversification.

Moreover, Credge's impressive growth trajectory, particularly in e-commerce, indicates potential for further expansion as consumer behaviors shift towards online shopping. MIT's involvement is likely to accelerate this growth, introduced through enhanced supply chain efficiencies aimed at improving customer experiences.

However, potential challenges such as market volatility and consumer preferences should not be overlooked. The fashion industry is subject to rapid changes, and continuous innovation will be critical for maintaining competitive advantage. Therefore, while this deal appears promising, it will require diligent monitoring and adaptability to ensure long-term success.

In summary, this transaction positions both Credge and MIT favorably within the evolving landscape of the fashion industry, and if executed strategically, it has the potential to yield significant returns for stakeholders involved.

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