Improving visitor numbers and net sales through initiatives at existing stores that address customer needs

「In terms of sales, performance during the consolidated fiscal year benefited from stores that opened in the previous fiscal year operating for the full year, contributing to a higher sales base. In addition to continuing collaboration events with anime content and Vtubers, independently developed bath and sauna events held by each store in line with local characteristics were successful in attracting a broad range of customers.」

「Sales increased during the interim consolidated accounting period as the Company continued to hold collaboration events with anime content and Vtubers, while also developing and offering diverse menus, including an Asian fair and sauna meals centered on beef offal, as measures to increase sales outside collaboration events, and inviting well-known sauna heat masters to enliven sauna events. In addition, each store independently planned and produced promotional videos for the original sauna drink “Lipospa” and distributed them on social media to increase awareness and attract more customers.」

「Performance during the consolidated fiscal year benefited from very strong collaboration events with anime content and Vtubers, as well as events held in partnership with regions including Minamitane Town, Kagoshima Prefecture. Together with revised admission fees and the expansion of seasonal pricing set for peak periods such as Obon and the year-end/New Year holidays, these initiatives resulted in sales exceeding those of the previous consolidated fiscal year, when China was included in the scope of consolidation.」

「Performance during the interim consolidated accounting period improved substantially, with sales exceeding those of the previous interim consolidated accounting period, when China was included in the scope of consolidation, and a significant increase in profit. This reflected strong collaboration events with anime content and Vtubers, as well as events held in partnership with regions including Minamitane Town, Kagoshima Prefecture, the development and promotion of various food and beverage menus including the original sauna drink “Lipospa,” revised admission fees, and the extension of the seasonal pricing period set for peak seasons.」

「The Company also reviewed its draft beer management methods and operating procedures to expand food and beverage sales by improving quality, and held collaboration events with local industries, including agricultural cooperatives.」

「In Japan, during the nine months ended the third quarter, performance benefited significantly from the recovery in customer traffic, strong collaborations with popular content such as Opanchu Usagi, Lycoris Recoil and Nijisanji, and increases in admission fees and ticket-book prices and the introduction of seasonal pricing at directly operated stores. The company also worked to revitalize local communities through collaboration events with agricultural cooperatives and actively conducted promotional activities, including sauna events. On the cost side, subsidies for electricity and gas charges continued, and the company worked to reduce costs through electricity conservation at all stores, resulting in substantial increases in both revenue and profit.」

「In Japan, during the six months ended the second quarter, performance benefited significantly from strong collaborations with popular content such as Hololive and Haikyu!!, as well as efforts to revitalize local communities through collaboration events with Minamitane Town and agricultural cooperatives (JA). Revenue also benefited significantly from higher admission fees and the introduction of seasonal pricing at directly operated stores, along with the active organization of sauna events. On the cost side, the company benefited from subsidies for electricity and gas charges and worked to conserve electricity at all stores, resulting in substantial increases in both revenue and profit.」

「In Japan, despite higher costs from rising energy prices and repairs and equipment maintenance, revenue and profit increased due to strong performance by collaboration events with various anime titles, including Hololive and Haikyu!!, as well as the substantial contribution from admission fee increases and the introduction of seasonal pricing at all directly operated stores since the previous year.」

「In recent years, to offset the decline in customer numbers and sales caused by COVID-19, the Company has regularly selected stores and held various collaboration events every 1 to 2 months with popular characters and content from well-known anime series, as well as products from well-known companies.」

「Japan’s performance in the third quarter, from October to December, benefited from strong collaboration events with anime content including “Kuroko’s Basketball” and “WhiTeez,” as well as YouTubers, and from the ¥50 increase in average admission fees across all stores in September 2022, resulting in higher sales.」

「Japan’s performance during the cumulative second-quarter consolidated period improved substantially, resulting in higher sales and profit. Although the number of COVID-19 cases reached a record high during the summer because of the seventh wave, collaboration events with anime content including “SPY×FAMILY” and “ONE PIECE FILM RED” performed well. In addition, there were no operating restrictions imposed in the same period of the previous year, such as shortened store hours, suspension of alcohol service and reduced hours in food and beverage areas.」

「In recent years, to offset the decline in customer numbers and sales caused by COVID-19, the Company has regularly selected stores and held various collaboration events every 1 to 2 months with popular characters and content from well-known anime series, as well as products from well-known companies. Collaboration events create reasons for customers to visit, and are expected to increase not only visitor numbers but also sales of collaboration merchandise and food and beverage sales from collaboration menus. By optimizing the stores and periods in which events are held, the Company expects an increase in sales of approximately ¥100 million per month, with a profit margin of approximately 30%. This fiscal year, the Company is working to increase the overall number of events by shortening the duration of each event more than in the previous year, increasing their frequency, and holding different events at different stores during the same period.」

「This fiscal year, the Company is working to increase the overall number of collaboration events by shortening the duration of each event more than in the previous year, increasing their frequency, and holding different events at different stores during the same period.」

「In Japan, performance in the third quarter (October to December) ended with an operating profit and increased revenue and profit compared with the same period of the previous year. This reflected strong performance by collaboration events featuring TV anime titles such as Tokyo Revengers and Attack on Titan, a recovery in consumer sentiment as the number of infections fell substantially, and increases in admission fees at certain directly operated stores to reflect higher costs associated with global inflation.」

「Although collaboration events including “Hypnosis Mic” performed well from July to September and contributed to sales, customer numbers and sales declined substantially from the previous period because the fifth wave of infections, which brought the highest-ever number of new cases, occurred and the fourth state of emergency was declared, significantly affecting customer traffic.」

「Japan’s performance during the cumulative first-quarter consolidated period was affected by voluntary suspensions of operations, shortened business hours, suspension of alcohol service and reduced hours in food and beverage areas in response to the declaration of a state of emergency and the application of priority preventive measures, among others. However, sales increased year on year because the collaboration event with the TV anime “Jujutsu Kaisen” performed well, restrictions were eased compared with the first state of emergency declared nationwide in April 2020, the same quarter of the previous year, and fewer directly operated stores were subject to restrictions.」

「In Japan, the Company took proactive steps, including holding collaboration events featuring the TV anime “Demon Slayer: Kimetsu no Yaiba,” “Osomatsu-san” and Sanrio characters, carrying out renovations such as installing one of the largest regional automatic löyly systems at its directly operated RAKU SPA Cafe Hamamatsu, and creating spaces where customers could enjoy themselves with peace of mind while measures were taken to prevent infection. In China, it worked to attract more customers by holding collaboration events with Gekkeikan and promotional events at cinemas.」

「From July to September, the Company held a collaboration campaign with the TV anime “Demon Slayer: Kimetsu no Yaiba.” In addition to attracting customers, strong sales of limited-edition merchandise and menus made a significant contribution, and the nationwide mood of self-restraint gradually eased, resulting in a substantial recovery from the cumulative first-quarter consolidated period.」

「Even after operations resumed, concerns about the spread of infection persisted. As customers continued to avoid eating out, ancillary spending in the food and beverage areas and elsewhere did not recover in line with visitor numbers, which also contributed to the decline in net sales.」

「Under these circumstances, we proactively pursued measures to improve performance, including collaboration baths and the sale of collaboration products featuring Keroppi and Gudetama in cooperation with Sanrio Company,Ltd., collaboration events with the film Fast & Furious, participation in the Happy Pink Bus Project to raise awareness of the Pink Ribbon movement, renovation of the existing RAKU SPA Tsurumi store, and promotional activities centered on leaflet distribution at all directly operated stores, including the 5 stores acquired in July.」

「Under these circumstances, in Japan, various events were held at certain directly operated stores and were well received, including limited-time event baths and the sale of collaboration products in collaboration with Sanrio Company,Ltd.'s Gudetama and the film Hellboy, as well as the Water Park, a large water-play facility featuring a water slide.」

「Under these circumstances, in Japan, at directly operated hot spring facilities, we continued to hold event baths and sell collaboration products in cooperation with other companies, as well as conduct various events」

「Under these circumstances, in Japan, we held a variety of large and small events at each store, including event baths and the sale of collaboration products in cooperation with other companies, as well as Halloween events.」

「Under these circumstances, in Japan, our Group held a variety of large and small events for parents and children at each store, including a limited-time Water Park pool event featuring a giant water slide at RAKU SPA Tsurumi, which was well received. In China, lodging services were launched at some existing stores as a measure to improve earning power during the summer, when visitor numbers decline, with the aim of capturing new demand and generating stable earnings throughout the year.」

「For the current fiscal year, as a result of measures including the full-year contribution from RAKU SPA Cafe Hamamatsu, which was renovated in the previous fiscal year, collaboration events with other companies, enhanced social media communications, and the introduction of high-priced menus such as a meat fair to attract customers to food and beverage services, sales to external customers were ¥10,893 million, a slight increase from ¥10,835 million in the previous fiscal year.」

「During the cumulative third quarter period (April to December), net sales increased slightly year on year. This was due to the full-year contribution from RAKU SPA Cafe Hamamatsu, which had been renovated in the previous fiscal year, as well as effective measures including collaboration events with other companies, enhanced social media communications, and the introduction of high-priced menus such as a meat fair to attract customers to food and beverage services.」

「Net sales increased year on year, partly because the results of RAKU SPA Cafe Hamamatsu, which reopened after renovation in August 2016, contributed for a full 6 months, and because efforts to optimize the number of benefit coupons distributed raised average customer spending.」

「In China, the company worked on refurbishing directly operated stores, implementing various measures to improve customer satisfaction, and preparing to open franchise stores scheduled to open during the fiscal year.」

「Visitor numbers and net sales for the current fiscal year were affected by major repairs and renovations, which resulted in more store closure days than in the previous fiscal year, the absence of new store openings by either directly operated or franchise stores, and the closure of 2 franchise stores in November. However, favorable calendar positioning of holidays, the implementation of proactive and effective initiatives, and favorable weather resulted in figures that were broadly unchanged.」

「However, the continued implementation of proactive and effective initiatives addressing customer needs, together with favorable weather, resulted in a 1.3% year-on-year increase in visitor numbers and a 0.3% increase in net sales at existing stores excluding stores undergoing renovations.」

「Visitor numbers at existing stores increased year on year because the effects of various initiatives implemented in the previous fiscal year were maintained and weather conditions were favorable. In addition, net sales at existing stores excluding stores undergoing renovations increased as a result of proactive and effective initiatives addressing customer needs.」