TOKYO, June 10 (Reuters) – Japan’s Asics announced on Wednesday that it will spin off its luxury Onitsuka Tiger division to speed up decision-making at a brand that has been a key driver of profits, thanks to the boom in tourism and increased demand for its retro-inspired sports sneakers.
According to the plan, Onitsuka Tiger, with nearly 80 years of history, will be transferred to OT Group, a wholly owned subsidiary, through a corporate split that will come into effect on January 1. There are no plans to take OT Group public, Asics Chief Executive Yasuhito Hirota said at a press conference.
The skyrocketing sales of the Onitsuka Tiger led to four consecutive years of record profits for Asics. The company’s shares, which compete with brands such as Nike, Adidas and Puma, have appreciated approximately seven times in the last five years, giving it a market value of around US$20 billion.
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“As organizations grow too large, decision-making often slows down as approvals become more complex and time-consuming,” said Tatsunori Kawai, chief strategist at Mitsubishi UFJ ESmart Securities. “Therefore, a spin-off is an ideal move for these fast-growing companies.”
Ryoji Shoda, named chief executive of the newly created OT Group, said the brand’s withdrawal from the US in 2023 was due, in part, to a conflict of approach between the management of Asics America and Onitsuka Tiger.
“There was a lot of difficulty in reaching a consensus on how we approached fashion and sport,” he said. “In this sense, by separating the company, we can manage several issues from the headquarters in Japan and we can start over (in the US).”
Shoda said Onitsuka Tiger will open a flagship store in Los Angeles in February. In Japan, the brand will also open what will be its largest flagship store in Tokyo’s bustling Shinjuku neighborhood on July 10, followed by another in Nagoya, central Japan, in August. Flagship stores are also planned for Shanghai, Milan and Seoul by September.
(Reporting by Mariko Katsumura and Chang-Ran Kim)
