Recognition of an extraordinary loss
The filing company, 株式会社MUSCAT GROUP, and its consolidated subsidiary, 株式会社WinC (the business formerly operated by 株式会社MOVE)
KLab shares and the electric-assist bicycle sales business operated by 株式会社WinC (the MOVE business)
The market value of KLab shares had declined by 50% or more from their acquisition cost at the end of the interim consolidated accounting period. The MOVE business's sales and operating income fell substantially short of its business plan due to factors including the contraction of Japan's electric-assist bicycle market, the products' high price and low purchase frequency, the difficulty of converting social media attention into purchases, and limited sales-channel synergies because the business's retail channels did not overlap with the existing wholesale network.
A valuation loss on investment securities of ¥133 million and an impairment loss of ¥183 million were recorded as extraordinary losses. The impairment loss comprised ¥158 million in goodwill and ¥24 million in property, plant and equipment and other assets.
Second quarter (interim period) of the fiscal year ending March 2027, consolidated accounting period (1 April 2026 to 30 September 2026)
For the full-year consolidated earnings forecast for the fiscal year ending March 2027, see the separately released notice entitled “Notice Regarding Revisions to the Full-Year Consolidated Earnings Forecast” published today.
Company response
For future M&A transactions, investment decisions will place particular emphasis on market growth potential and synergies among sales channels.
There is no change to the policy of making “growth-oriented treasury-related investments,” and no new investments are planned at this time. 株式会社KLab shares will continue to be held at this time, but the policy is to sell them depending on market conditions and investment decisions. For the MOVE business, options that leverage its brand value are being considered, and an announcement will be made once the policy is decided. Following the impairment, no goodwill amortization expense related to the MOVE business will arise from the third-quarter consolidated accounting period onward.
The future policy for the MOVE business will be announced once decided.
| Item | Details |
|---|---|
| Event name | Recognition of an extraordinary loss |
| Date of occurrence | 30 September 2026 (recorded at the end of the interim consolidated accounting period) |
| Subject Entity | The filing company, 株式会社MUSCAT GROUP, and its consolidated subsidiary, 株式会社WinC (the business formerly operated by 株式会社MOVE) |
| Target Locations / Products | KLab shares and the electric-assist bicycle sales business operated by 株式会社WinC (the MOVE business) |
| Cause | The market value of KLab shares had declined by 50% or more from their acquisition cost at the end of the interim consolidated accounting period. The MOVE business's sales and operating income fell substantially short of its business plan due to factors including the contraction of Japan's electric-assist bicycle market, the products' high price and low purchase frequency, the difficulty of converting social media attention into purchases, and limited sales-channel synergies because the business's retail channels did not overlap with the existing wholesale network. |
| Amount of Impact on Business Performance | A valuation loss on investment securities of ¥133 million and an impairment loss of ¥183 million were recorded as extraordinary losses. The impairment loss comprised ¥158 million in goodwill and ¥24 million in property, plant and equipment and other assets. |
| Accounting period in which recognized | Second quarter (interim period) of the fiscal year ending March 2027, consolidated accounting period (1 April 2026 to 30 September 2026) |
| Impact on Earnings Forecast | For the full-year consolidated earnings forecast for the fiscal year ending March 2027, see the separately released notice entitled “Notice Regarding Revisions to the Full-Year Consolidated Earnings Forecast” published today. |
| Measures to prevent recurrence | For future M&A transactions, investment decisions will place particular emphasis on market growth potential and synergies among sales channels. |
| Outlook | There is no change to the policy of making “growth-oriented treasury-related investments,” and no new investments are planned at this time. 株式会社KLab shares will continue to be held at this time, but the policy is to sell them depending on market conditions and investment decisions. For the MOVE business, options that leverage its brand value are being considered, and an announcement will be made once the policy is decided. Following the impairment, no goodwill amortization expense related to the MOVE business will arise from the third-quarter consolidated accounting period onward. |
| Planned follow-up disclosure | The future policy for the MOVE business will be announced once decided. |
Items this document does not state (14)
These are items the company does not state in this document. We do not leave them blank, nor fill them in from other sources or by inference.
The reasons the company gives
The company's own explanation, not something inferred from the numbers.The market value of KLab shares had declined by 50% or more from their acquisition cost at the end of the interim consolidated accounting period. The MOVE business did not recover because of factors including the contraction of Japan's electric-assist bicycle market, the products' high price and low purchase frequency, the difficulty of converting social media attention into purchases, and limited sales-channel synergies with the existing wholesale network, resulting in performance falling substantially short of the business plan.