New Karaoke Store Openings and Preparation for the Growth Stage

「The Group is actively rolling out Karaoke no Tetsujin Collaboration Mix, which specializes in collaborations with anime, game and other content, and opened 3 new locations during the current interim consolidated accounting period. It will continue opening stores, mainly in regional cities.」

「Meanwhile, Karaoke no Tetsujin Collaboration Mix, a fully collaboration-focused karaoke format specializing in projects with anime, game and other content, has performed relatively well. During the current interim consolidated accounting period, the Company opened 2 new locations and plans to continue opening stores, mainly in regional cities.」

「The Company is actively opening collaboration-focused stores in major cities nationwide.」

「For store-level profit and loss management, the Company reviewed all costs, including reducing expenses such as consumables and negotiating lower store rents, while substantially curbing investment.」

「On 10 February 2020, the Company opened Karaoke no Tetsujin Akihabara Showadoriguchi.」

「As part of its store-opening results, the Company opened Akakara Kamata inside Karaoke no Tetsujin Kamata in November 2019, making it the second location combining food service and karaoke.」

「As part of its carefully selected store-opening strategy from the previous fiscal year, the Company opened a new location, Karaoke no Tetsujin Gotanda-Nishiguchi, on 21 December 2018.」

「As part of its strategy of fully resuming carefully selected store openings from the current fiscal year, the Company opened a new location, Karaoke no Tetsujin Toyocho, on 25 July 2018, the first opening in 1 year and 7 months.」

「The Company is strengthening its store development structure to resume opening new locations and plans to open stores during the current fiscal year.」

「Regarding the Voice restaurant karaoke venue in Nishi-Azabu, Tokyo, the former management team made overly optimistic assumptions when acquiring the operating rights. Because the gap between the originally projected sales budget and actual sales was substantial and recovery was not expected to be achievable, goodwill recorded when the operating rights were acquired was impaired.」

「To further expand the potential of karaoke, we acquired the operating rights to “Voice,” a restaurant karaoke venue in Nishi-Azabu, Tokyo, marketed as private karaoke, and will continue opening stores mainly in central Tokyo, leveraging our strengths.」

「Regarding new store openings, which had been suspended for approximately 3 years, we resumed expansion on 9 December 2016, initially in the Ikebukuro East Exit area of Tokyo, which was becoming a new mecca for subculture. We held events including handshaking events with anime characters using VR equipment and autograph sessions with popular manga artists, achieving a strong start. Going forward, we will continue opening stores mainly in central Tokyo, leveraging our strengths.」

「Regarding new store openings, which had been suspended for approximately 3 years, we decided on 9 December 2016 to resume expansion, initially in Tokyo’s Ikebukuro area, which was becoming a new mecca for subculture, in order to fully leverage our strengths, and proceeded with preparations.」

「We had been considering increasing sales by resuming new store openings, but rising rents at candidate sites in the Tokyo metropolitan area led us to begin a major review of opening costs and carry the openings forward to the next fiscal year.」

「In addition, during the current fiscal year, we began considering new karaoke-store openings that would fully leverage the strengths of our karaoke business and began preparing for the growth stage.」