Aderans to close, integrate 30 unprofitable shops under new leadership.

TOKYO, July 15 Kyodo

Japan's largest wigmaker Aderans Holdings Co., now under the leadership of its top shareholder U.S. hedge fund Steel Partners, said Wednesday it will close or integrate about 30 unprofitable shops as part of its restructuring plan to bring back the company to profitability.

Following a leadership change after a face-off between Steel Partners and the then incumbent management at the shareholders' meeting in May, Aderans said it aims to make its operations leaner and focus on its mainstay wig business, pointing to failure with diversifying businesses as among key reasons for its sluggish earnings performance under the previous board.

The money-losing outlets are part of the Tokyo-based firm's 445 stores, including wig sales shops. The planned consolidation will reduce costs by 600 million yen in fiscal 2010 compared to fiscal 2008, Aderans said.

By cutting down on expenses as well as selling noncore assets, Aderans said it will use the cash obtained from these steps to set up new stores and return profits to shareholders. Noncore assets include properties with a book value of 4 billion yen and securities carrying a book value of 9.5 billion yen.

As a measure to return profit to shareholders, Aderans said it will obtain up to 2 million of its own shares, or 2.5 billion yen worth of shares.

Among its restructuring measures, the wigmaker also said it will integrate its subsidiaries in Japan and abroad.

Asked if Steel Partners made any requests about the management policy, Aderans President Nobuo Watabe said at a news conference in Tokyo, ''There was no request other than that to improve the corporate value (of Aderans).''

Watabe also denied plans for a management buyout.

Aderans' announcement of its new business reform plan came a day after it canceled its earnings forecast announced under the previous management for its fiscal year through next February, saying it will release a fresh forecast in early October based on its reform plan.

In its earnings report released in April, Aderans said it posted a group net loss of 2.17 billion yen for the 2008 business year ended in February, falling into the red for the first time in four years due to shrinking demand for its wig products amid the economic downturn.

In late May, Steel Partners, which holds a 26.7 percent stake in Aderans through Steel Partners Japan Strategic Fund (Offshore) L.P., effectively gained leadership over Aderans after its nominees for board members, including Watabe, were approved by shareholders.