Posted by Dave Bull at 1:38 PM, February 13, 2006
TOKYO (UP News) - Woodblock.com sent a mixed message to the markets today, with its announcement of a business re-organization plan that will be unveiled later this month, while simultaneously warning of the possibility that up to one job may be lost this year.
The warning of possible job loss came even as the organization reported a preliminary net profit for 2005 of 1.28 million yen (US$10,864), up from the critical figure of .30 million yen the year before. As this figure easily surpassed forecasts, the news of the pending re-organization came as a shock to analysts.
Woodblock.com Chief Executive Officer David Bull said that the new program's primary aim was not to cut jobs, but rather to bring productivity up to international standards, and to increase market share.
Speaking at his Tokyo, Ome headquarters, the 'Seseragi Studio', he did not offer many details, but noted that the organization has an agreement with its labour force that prevents outright layoffs. "We have a collective agreement, and it is not our intention to quit that agreement", he said.
Printer David Bull, head negotiator for the organization's labour force, said that the workers were for the moment, taking a 'wait and see' attitude towards the upcoming re-organization. "The management should understand that we have complete solidarity; every worker here is of the same opinion, that no job should be lost. We are willing to accept some re-writing of job descriptions, but will not accept any new policy that would result in any decrease in the quality of work we are doing."
Financial markets had closed by the time of the announcement, but it is not expected that trading will be severely impacted when they open in the morning.
One analyst from a major brokerage, speaking on condition he not be identified, speculated on the reasons for the re-organization announcement. "We've been watching Woodblock.com carefully for a couple of years now. Since they invested their entire cash reserve on the purchase of the new workshop building five years ago, they have been in a somewhat precarious position. Back in December, at the time of the announcement of the product line for 2006, a number of analysts speculated that the new products - although very attractive to a number of potential buyers - did not have a wide appeal, and that the order book would suffer. The announcement today of a re-organization would seem to confirm that speculation."
"As to just what the organization has in mind, we'll have to wait until they announce the details." He added, "They really don't have much 'wiggle room'; their labour force is working at full capacity, their major P/R event for the year - the annual exhibition - is over, and they are committed to completing the prints they announced for 2006. On top of this, their cash reserve is completely depleted. Frankly speaking, we can't imagine just how they are going to dig themselves out of this hole."
But another analyst wasn't ready to count the company out. "We've seen them come back before; look how quickly their sales rebounded when they produced that wonderful 'Hanga Treasure Chest'. They have one very undervalued asset - their highly-skilled and well-motivated labour force. As long as they don't lose sight of their core mission - to produce world-class woodblock prints, they should pull through."
The company wasn't certain of the precise timing of the upcoming re-organization announcement. "All in good time" CEO David Bull said, "We've got to have everything in place ready to go before we pull back the curtains. But we can promise one thing - fans of good woodblock prints won't be disappointed!"
