APRIL 2008 W4 ALERT
JVC Signs Off From TV Business
Company Decides to Withdraw From Domestic (Japan) TV Biz
<Nikkei-TOKYO>In several reports last week, the Nikkei in Japan reported that Victor Company of Japan, known as JVC has decided to withdraw from the domestic television business in Japan in order to focus their energies on their existing television business in Europe and the U.S. They also want to streamline the business in preparation for their merger with Kenwood, expected to take place by October of this year.
JVC ranked sixth in overall television market share in Japan and has failed to achieve sales targets. This has resulted in a de-leveraging of their business and profits have suffered as a result. JVC has said that the slump in their display business leads them to project a special loss of 24.2 billion yen (just under $234 million) from an originally estimated loss of 11 billion yen (just under $106 million). Group net losses (consolidated) are expected to be 47.8 billion yen ($460 million) versus an originally anticipated 32.5 billion yen ($313 million). This will be their fourth straight net loss.
In addition to their struggling television business, the Nikkei cited other contributors to the JVC performance including extraordinary charges related to an early retirement program, foreign exchange losses, and write-downs on their unprofitable operations in anticipation of their merger with Kenwood.
JVC developed the first television receiver in Japan in 1939 and was considered an innovator in the business for many years. Late, JVC launched VHS videotape systems which gave it a steady income for many years in licensing fees.
The company plans to shut its facility in Yokosuka. Several hundred employees are affected and will most likely be transferred to other divisions. JVC will continue to offer repair and maintenance services for the sets it has already sold there.