Closed Kimono Firm Likely Causes 200 M. Yen in Damages

January 14, 2018

Tokyo- The shutdown of kimono rental firm Harenohi, which ruined Coming-of-Age Day celebrations for many women last week, is likely to have caused more than 200 million yen in damages to customers.

The governments of seven cities where Harenohi had outlets, such as Yokohama of Kanagawa Prefecture, Hachioji in western Tokyo and Fukuoka in southwestern Japan, had received 709 requests for support by Friday.

The value of contracts with Harenohi concluded by those seeking support reached 227 million yen. Total damages caused by the Yokohama-based company are likely to be even bigger.

Police are investigating whether the company committed fraud.

The shutdown came to light on the Coming-of-Age Day on Monday. In usual years, many women wear kimonos to attend celebration ceremonies.

But this year, many new adults could not wear the traditional wear, and some had to give up attending ceremonies hosted by municipalities.

Harenohi outlets were shut down in Hachioji and elsewhere, while kimono dressers and other staff failed to show up at a hotel in Yokohama where the company was supposed to dress customers.

According to credit research firm Tokyo Shoko Research Ltd., Harenohi had 610 million yen in liabilities as of September 2016. The shutdown is believed to have followed a sharp increase in personnel and rental costs due to rapid business expansion.

New adults were not the only victims. Harenohi has not paid three companies in Kyoto, western Japan, tens of millions of yen for kimonos and accessories supplied by the three.

An industry source said Harenohi's nonpayment began around 2015.

The Yokohama hotel where Harenohi was supposed to help new adults with kimonos on Monday has not received one million yen in rental fees for the venue.

Harenohi's president did not respond to a request for the money from the hotel when he visited the venue on Dec. 27 last year, a hotel source said.

Investigative authorities are examining when the Harenohi management recognized the company's effective business failure.

This is because fraud charges are usually established for contracts companies concluded after they effectively became unable to continue business. Some kimono rental and purchase contracts with Harenohi were inked more than a year ago.

The whereabouts of the 55-year-old president is unknown. There is information that the man has left Japan. Jiji Press