| Valuation method | Value, ¥ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 332.30 | 7 |
| Intrinsic value (DCF) | 79.20 | -74 |
| Graham-Dodd Method | n/a | |
| Graham Formula | 3416.00 | 1002 |
RIGHT ON Co., Ltd. (7445.T) is a leading Japanese retailer specializing in casual wear, particularly denim and other casual apparel for men and women. Headquartered in Tokyo, the company operates approximately 426 stores across Japan and maintains an online sales presence. Founded in 1980, RIGHT ON has established itself as a key player in Japan's apparel retail sector, catering to fashion-conscious consumers seeking affordable, trendy clothing. The company's product mix includes jeans, tops, and accessories, positioning it in the competitive fast-fashion segment. While the company faces challenges from both domestic and international competitors, its strong store network and brand recognition in Japan provide a solid foundation. The apparel retail industry in Japan remains highly sensitive to consumer spending trends, with RIGHT ON's performance closely tied to domestic economic conditions and shifting fashion preferences among Japanese youth and young adults.
RIGHT ON presents a high-risk investment proposition in Japan's challenging apparel retail sector. The company's negative net income of -¥12.14 billion and negative operating cash flow of -¥577 million in the most recent fiscal year raise significant concerns about its financial health and operational efficiency. While the company's beta of 0.614 suggests lower volatility than the broader market, the lack of dividends and ongoing losses may deter conservative investors. Potential investors should closely monitor the company's turnaround efforts, particularly its ability to adapt to changing consumer preferences and compete effectively against both fast-fashion giants and online retailers. The modest market capitalization of ¥9.69 billion reflects market skepticism about the company's prospects. Any investment thesis would need to account for Japan's stagnant retail environment and the company's need for significant operational improvements.
RIGHT ON operates in Japan's highly competitive apparel retail sector, where it faces pressure from multiple fronts. The company's primary competitive advantage lies in its established store network and domestic brand recognition, particularly in the denim segment. However, its positioning is challenged by several factors: international fast-fashion giants offer trendier products at competitive prices, while e-commerce platforms provide greater convenience. RIGHT ON's middle-market positioning makes it vulnerable to squeeze from both premium brands and discount retailers. The company's financial struggles (-¥12.14 billion net loss) suggest it lacks the scale and efficiency of larger competitors. While its focus on denim provides some differentiation, this niche may be too narrow to sustain profitability in current market conditions. The company's relatively small online presence (compared to pure-play e-commerce competitors) represents another weakness. To improve competitiveness, RIGHT ON would need to either significantly enhance its digital capabilities or find ways to better leverage its physical store network through experiential retail concepts or superior customer service.