Sony to Cut Electronics Inventory by 25% Over a Year (Update1)
By Hiroshi Suzuki and Kyoko Suzuki
quote.bloomberg.com
Tokyo, March 7 (Bloomberg) -- Sony Corp., the world's second- largest consumer-electronics maker, plans to pare its electronics product inventories by a quarter in the year starting April to boost profitability at its ailing electronics division.
Tokyo-based Sony will reduce the amount of products in storage, ranging from Vaio personal computers and PC displays to digital video-cameras, to about 427 billion yen ($3.3 billion) in the next fiscal year, down from 570 billion yen targeted for the end of this month, Takeshi Sudo, general manager at Sony's investors relations division, said in an interview.
The company plans to hold less inventory by shortening the period between receiving orders and shipping out products. Sony, which expects an operating loss of about 30 billion yen at its electronics business in the three months to March 31, needs to adapt more quickly to changing consumer demand, investors said.
``It is true that a lower inventory level is better, but the question is, which product inventories are they trying to cut?'' said Yoshiya Morimoto, who helps manage $7.2 billion in equities at Japan Investment Trust Management Co. ``I don't see strong benefit in cutting only the level.''
Sony plans to reduce inventory turnover to an average of 30 days in the year starting April, down from about 42 days as of the end of December, he said. The company plans to pare electronics inventories by a third this fiscal year ending March 31 compared with the previous year. |
