Expanding stores and formats in Taiwan

「ASMO CATERING (TAIWAN) COMPANY LIMITED, formerly a consolidated subsidiary, was dissolved and completed liquidation, and has therefore been excluded from the scope of consolidation from the current consolidated fiscal year.」

「During the current interim consolidated accounting period, we reorganized companies in the Other business and withdrew from the operation of food-service stores in Taiwan. As a result, the number of the company's affiliates decreased by 1 sub-subsidiary.」

「ASMO CATERING (TAIWAN) COMPANY LIMITED is not included because its operations are suspended and it holds no equipment.」

「ASMO CATERING (TAIWAN) COMPANY LIMITED closed its unprofitable stores and suspended operations in the fourth quarter of the previous consolidated fiscal year. It continues to prepare from various perspectives for an opportunity to resume operations in a format that fully leverages the Group's strengths.」

「From October onward, more large-scale commercial facilities opened in Taipei, causing even the two stores that had maintained profitability to fall into monthly losses. In addition, we were approached about a rent increase when the contracts were renewed at the end of February 2019. We judged that maintaining profitability would be difficult, so we decided to close both stores temporarily and monitor conditions while looking for an opportunity to try again in the future.」

「Competition among Japanese department stores has intensified, leaving both of our stores in a difficult sales and profit situation. We are reviewing our business operations to overcome the current situation.」

「ASMO CATERING (TAIWAN) COMPANY LIMITED, which is included in the Other segment, operates two stores: Japanese restaurant Imasuke at Sogo Tennoz and Saitondoya at Sogo Fuxing. As Sogo itself plans to renovate both locations, we will continue discussions with Sogo regarding the two stores after the renovations.」

「ASMO CATERING (TAIWAN) COMPANY LIMITED, which is included in the Other segment, has operated with two stores since the previous consolidated fiscal year and is focusing first on strengthening its internal capabilities in preparation for future business development. As both stores are located inside Sogo department stores, we will also work to strengthen communication with Sogo.」

「The company has operated its Taiwan business since 2014, and local employees had become considerably more engaged. Accordingly, since October 2017, we have eliminated the assignment of Japanese staff and shifted to a management structure centered on oversight from Hong Kong. Hong Kong has several executives with more than 20 years of experience at the company, and communication with Taiwanese staff has presented no problems. Hong Kong staff also traveled to Taiwan to provide guidance when both stores opened, so we have changed to a management structure under which Hong Kong staff make regular visits. In the current consolidated fiscal year, revenue declined to ¥162 million, down 17.9% year on year, partly because we withdrew from the Hsinchu Sogo store in February 2017. However, management expenses fell as a result of eliminating the assignment of Japanese staff, as described above, and operating profit improved to a loss of ¥0 million, compared with a loss of ¥10 million in the previous fiscal year.」

「At Imasuke, we revamped the main menu in July. As the featured new item, we introduced tendon, which is highly popular in Taiwan, and the set menu with udon became the top-selling product. The food-court shop Saitondoya also introduced a new hot-pot udon menu. We have steadily worked to return the company to profitability by downsizing and relocating offices and streamlining the organization to contain indirect costs.」

「ASMO CATERING (TAIWAN) COMPANY LIMITED operates two stores: Japanese restaurant Imasuke inside the Tennoz Sogo store on the outskirts of Taipei, and the food-court shop Saitondoya inside the Fuxing Sogo store in central Taipei. At Imasuke, in July the company added the newly developed pork and yuzu-pepper udon and chicken hot-pot udon, as it had at Imasuke in Hong Kong, and added tendon, which is highly popular in Taiwan, to the main menu. It also launched new set menus combining its core udon varieties with mini tendon, and sales have been strong. The company is also controlling various expenses to restore the business to a profitable structure so that it can develop new operations in the next fiscal year. As a result, revenue from other businesses for the cumulative second quarter of the current consolidated fiscal year was ¥352 million, down 5.1% year on year, while segment profit (operating profit) was ¥15 million, compared with ¥1 million in the same period of the previous fiscal year.」

「However, we closed Kobe Kitanosaka at the end of February of the previous fiscal year, as it had failed to become profitable since opening, and have operated with two stores since the current fiscal year. We have also reduced labor costs and other indirect personnel expenses, and will first restore the business to a leaner structure capable of achieving profitability with two stores by the second half of the fiscal year, after which we will prepare to resume opening stores, centered on Japanese restaurant Imasuke. As a result, revenue for the cumulative first quarter of the current consolidated fiscal year was ¥174 million, down 4.3% year on year, while segment profit (operating profit) was ¥1 million, compared with a segment loss of ¥0 million in the same quarter of the previous fiscal year.」

「However, even at the struggling Tennoz Sogo store, Japanese restaurant Imasuke has many regular customers, and we intend to focus our future development in Taiwan on the same business category.」

「However, even at the struggling Tennoz Sogo store, Japanese restaurant Imasuke has many regular customers, and we intend to focus our future development in Taiwan on the same business category.」

「Although the Tenmu SOGO store has been sluggish, “日本料理　今助” has many regular customers, and the company intends to focus its future expansion in Taiwan on this type of business.」

「However, in early March the company opened “彩丼屋,” a specialty restaurant offering Japanese rice bowls and boxed lunches, in the food court of the SOGO Fuxing store in Taipei, and “神戸 北の坂” in the BIGCITY commercial facility in Hsinchu.」