Miyazaki Towel: Resilience Through Collaboration

Miyazaki Yōhei didn't want to be a towelier. 

When he inherited his father’s company, Miyazaki Towel, the business was drowning in debt and facing bankruptcy. The outlook was bleak. Globalization had flooded the market with cheaper towels from China and Korea, while some Imabari firms hollowed themselves out by outsourcing production abroad. The once-thriving towel capital of Japan was in freefall: the number of factories in Imabari had collapsed from thousands at its postwar peak to just a fraction today.

For Yohei, walking away seemed like the rational choice. He wanted to quit towels altogether, liquidate the factory, and pay off the debt. But even selling the building and all personal possessions wouldn’t have been enough. Backed into a corner, he was forced into something far harder: reinventing the company.

In generations past, Miyazaki Towel and Watanabe Pile had been direct competitors, each weaving and selling their own towels. Both relied on Colorsville, a dyeing company, as a supplier.

But this competitive structure, once viable, was crumbling under global pressure. Cheap imports eroded margins, demand for traditional towels shrank, and factory after factory in Imabari shuttered. What had been rivalry was now mutual decline.

The Towel Muffler

Instead of fighting for survival in conventional towels, Yohei staked everything on his father’s greatest innovation: the towel muffler.

The muffler is a hybrid between a scarf and a towel, made from gauze-like towel fabric. Designed for Japanese consumers who wanted to avoid sun exposure, it’s lightweight, UV-protective, and sweat-absorbent. Unlike conventional towels, it carved out a clear niche that was both functional and fashionable.

To make this pivot, Yohei radically downsized. He laid off most workers, cut back factory operations, and repositioned Miyazaki Towel as a hyperspecialist in design and branding. 

A New Model

The most daring move was outsourcing production to Miyazaki Towel’s former rival. Watanabe Pile, once its fiercest competitor, became its weaving partner. Watanabe was renowned for producing high-quality fabrics on older machines with veteran workers.

Meanwhile, Colorsville underwent its own transformation. Formerly a dyeing company, family losses left only one successor. Yohei, seeing an opportunity, convinced Colorsville to pivot into sales and distribution.

The result was a new division of labor:

• Miyazaki Towel → design, brand, and logistics.

• Watanabe Pile → weaving and production.

• Colorsville → sales and retail distribution.

What had once been competition was now collaboration, each firm hyper-specializing in what it did best.