Simple decoy of the bottomline
After posting the worst annual loss in its 100-year history, Sharp Corp. 6753.TO +4.94% said it plans to replace both its president and chairman after just one year in an unusually public rebuke of management that underscores the depth of the struggling electronics maker's problems.Sharp said Tuesday that Executive Vice President Kozo Takahashi, 58, will replace current President Takashi Okuda, who led the company during a tumultuous year in which it scrambled to secure capital and warned about its future as a going concern. Mr. Okuda will become a chairman without representative rights, replacing Mikio Katayama, a former president who oversaw Sharp's aggressive—but ultimately failed—expansion of its liquid-crystal-display TV-panel business.
The changes will occur after Sharp's shareholders meeting June 25. Sharp's woes are a microcosm of the problems that have gripped Japan's once-dominant electronics industry. After years of record profit that catapulted it to the top of Japan's electronics sector, Sharp spent billions of dollars to build a state-of-the-art LCD plant in Japan. When demand for flat-screen televisions slowed in the wake of the financial crisis and the yen rose sharply—hurting the competitiveness of its exports—Sharp's losses ballooned. Like its Japanese peers, Sharp also failed to match the operational speed or marketing might of Samsung Electronics Co. 005930.SE +1.56% Sharp's televisions dominated in the domestic market, but it struggled to build the same type of brand appeal overseas. When the Japanese government eliminated subsidies encouraging domestic consumers to switch to new LCD models, it worsened Sharp's problems. Sharp logged a bigger net loss of ¥545.35 billion ($5.4 billion) in the year ended in March, from a ¥376.08 billion loss in the previous year. Sharp's operating loss came to ¥146.27 billion from a loss of ¥37.55 billion a year ago on ¥2.48 trillion in revenue, virtually unchanged from last year. "We need to say goodbye to the Sharp that we knew in recent years," Mr. Takahashi told reporters at a news conference. "We need to be ready to change everything at the company, other than the founding principles."