Ricoh May Withdraw or Sell Multiple Businesses to Increase Profitability

Ricoh is set to evaluate its many business segments and determine which it will withdraw from or attempt to sell as it aims to increase its return on investment in the 2023 fiscal year.

According to a report from the Japanese publication Newswitch (Nikkan Kogyo Shimbun), spotted by Digicame-Info, Ricoh’s chief financial officer Shun Kawaguchi says that the company needs to determine which of its businesses to keep in order to reach the goal of 8% return on invested capital (ROIC) in fiscal year 2023.

“The time has come for us to make choices about our business,” Kawaguchi says, translated.

The focus on ROIC is an indicator of business efficiency, Newswitch writes, and the Ricoh will set up an internal system to evaluate the company’s businesses from the perspective of market position and suitability for transition to digital services (Ricoh says it is shifting from a “multifunction machine to a digital service company”).

According to the report, Ricoh currently operates about 30 businesses, one of which is the imaging division that produces both Ricoh and Pentax-branded cameras and lenses. As it evaluates ROIC, the company is prepared to withdraw from or attempt to sell businesses that aren’t in line with those financial goals. While no mention of Ricoh’s photography businesses was mentioned, it’s hard not to think its investment in cameras will be heavily scrutinized when one of the perspectives it is evaluating success is market position.

Pentax cameras, while expensive, have proven to be solid and reliable. Despite this, the brand has been reduced to a relatively bit player in both Japanese and North American markets in the face of Sony, Nikon, and Canon which dominate sales charts. While the company continues to produce new cameras an lenses at a decent cadence, it also chose to turn its nose up at mirrorless technologies and instead doubled down on DSLRs. It also began offering special photo color modes only available with select lenses and shifted to a “workshop-like” business strategy in Japan.

The company narrowed its focus to better serve its small subset of fans, but that does not necessarily mean that Pentax has been able to increase its ROIC percentage.

Digicame-Info notes that Ricoh Imaging’s president Akabane said in an interview earlier this year that it had no intention to withdraw from the camera industry.

“It’s true that Ricoh’s camera business is facing a major turning point, but we have no plans to withdraw from the business,” he said.

It remains to be seen if Akabane’s beliefs will be in line with Ricoh’s financial expectations.

Image credits: Header photo licensed via Depositphotos.