Reforming a Fixed-Cost-Based Earnings Structure and Creating New Value-Added Services for Sports Clubs

「◆ Sports club business and related businesses ・Review staffing at unprofitable facilities, implement rigorous cost management and tighten investment criteria ・Identify and discontinue low-profitability areas, including stores, products and operations ・Improve productivity by reviewing the roles and activities of business support functions ・Streamline non-customer-facing operations through DX and expand the scope of operations covered per employee」

「採算性の低い領域（店舗・アイテム・オペレーション）の特定と廃止」

「As part of efforts to enhance the appeal of our facilities, we invested in renovations at 38 existing locations, including expanded sauna and spa areas and the introduction of coworking spaces, with the aim of making sports clubs places where customers can refresh both mentally and physically through a broad range of offerings beyond exercise.」

「In the sports club business, we aim to improve profitability by making capital investments and reviewing membership fees in line with the market environment and characteristics of each facility.」

「For “Strengthening the earnings base and reforming the business structure” and “Business succession and M&A,” we formed a project with Advantage Advisors, Inc., our capital and business alliance partner, to implement measures tailored to the characteristics of each facility’s earnings structure and consider business succession and M&A opportunities that would enhance customer value.」

「Costs remained substantially below plan because utility expenses were contained through company-wide energy-saving measures and the government’s program to mitigate sharp increases in electricity and gas prices.」

「To address recent increases in various costs and enhance value through continued investment in personnel and equipment, we implemented price revisions for fitness memberships sequentially from July.」

「From a cost perspective, utility expenses remained elevated, but costs were substantially below plan due to company-wide energy-saving measures and the government’s program to mitigate sharp increases in electricity and gas prices.」

「Operational efficiency through automation, labor reduction and consolidation of operations based on standardized store operations」

「We have begun promoting DX to improve the profitability of sports clubs as a priority theme.」

「Energy costs are trending higher amid soaring global resource prices. In response to the government’s request to conserve electricity from July onward, we are also implementing electricity conservation and energy-saving measures throughout our facilities.」

「By implementing earnings structure reforms, including appropriate personnel allocation, control of operating costs such as utilities, and in-house facility maintenance, revenue from the sports club business increased 22.2% year on year, and earnings were substantially higher than in the previous consolidated fiscal year.」

「We continue to reform the earnings structure and are working to reduce costs by bringing facility maintenance in-house and optimizing personnel allocation.」

「To lower the break-even point, we are promoting a structure in which individual employees handle multiple specialized functions, beginning the pilot introduction of a contact center that consolidates telephone reception operations, and improving operating efficiency. We are also improving equipment-related costs by strictly managing operations for running costs such as utilities and by bringing facility maintenance in-house. To enhance value, we introduced a web reservation system for studio programs in April to reduce congestion within facilities and improve convenience.」

「② Reforming the earnings structure and creating new value in the sports club business We will shift away from our previous earnings structure, which had a high proportion of fixed costs, primarily equipment and personnel expenses, and lower the break-even point. We will also review our services from the customer’s perspective, moving beyond services centered on visits to our facilities by combining them with digital offerings, and create new value at our sports clubs.」