Restructuring the Overseas Business

「Revenue from overseas operations, translated into yen, increased 24.2% year on year in Mainland China. While weak domestic demand and stagnant consumption continued against the backdrop of the property downturn, the cost-efficient standard-format stores and cross-channel strategy linking e-commerce performed steadily. Revenue in Hong Kong and Taiwan increased 16.2% and 22.5%, respectively, supported by continued strong performance from new stores opened under the multi-brand strategy and e-commerce.」

「Going forward, the Company will accelerate investment in Southeast Asia as its next growth pillar, expanding its physical stores and operating regions. In Greater China—mainland China, Hong Kong and Taiwan—it will strengthen its multi-brand strategy and pursue stable growth.」

「Revenue from overseas operations, translated into yen, increased 4.0% year on year in Mainland China. Although the effects of the property downturn and sluggish consumption remained, the cost-efficient standard-format stores and cross-channel strategy linking e-commerce performed well. Revenue in Hong Kong and Taiwan increased 2.6% and 18.0%, respectively, supported by continued strong performance from new stores opened under the multi-brand strategy and e-commerce. In the US, where we decided to withdraw, revenue declined 12.0% as weak wholesale operations continued. In addition, the transfer of the equity interest in Velvet, LLC, a US operating subsidiary’s sub-subsidiary, was completed on 25 July 2025. Revenue increased in Thailand and the Philippines due to store openings, and overseas operations as a whole posted 3.9% revenue growth.」

「Going forward, we will accelerate investment in Southeast Asia as our next core growth driver and, alongside opening physical stores, deploy an OMO strategy using the e-commerce platform developed in Japan. We will establish a structure capable of capturing the region’s high economic growth over the long term. In Greater China (Mainland China, Hong Kong and Taiwan), we will strengthen the multi-brand strategy and pursue stable growth.」

「Revenue in Hong Kong and Taiwan increased 26.9% and 30.3%, respectively, due to the strong performance of the multi-brand strategy and new store openings. Revenue in the US declined 0.2% due to weak wholesale operations. Thailand, where operations began in the second quarter of the previous fiscal year, posted 70.2% revenue growth, including the net additional revenue generated in the first quarter of the current fiscal year. Overseas operations as a whole posted 14.8% revenue growth.」

「Revenue from overseas operations, translated into yen, increased 40.6% in Taiwan and 39.9% in Hong Kong, supported by strong performance from physical stores and e-commerce under the multi-brand strategy. In Mainland China, e-commerce performed strongly despite the impact of the property downturn and sluggish consumption, resulting in 7.5% year-on-year revenue growth. In the US, revenue declined 5.4% due to weak wholesale operations. As Thailand began operations in the second quarter of the previous fiscal year, it generated net additional revenue in the first quarter of the current fiscal year, and overseas operations as a whole posted 18.6% revenue growth.」

「Although operations in Mainland China and the US remained challenging in 2023 due to the deteriorating consumer environment, we achieved growth across overseas operations through the expansion of store openings by our Taiwan subsidiary, which marked its 20th anniversary, improved profitability in Hong Kong, and the development of the Southeast Asian market. We will continue to accelerate investment overseas.」

「Overseas sales, translated into yen, increased year on year by 91.6% in mainland China, 29.8% in Hong Kong and 50.1% in Taiwan, supported by recovery from the impact of COVID-19 and contributions from new store openings. In Taiwan in particular, new store openings in line with the multi-brand strategy contributed to higher sales. In the United States, the wholesale business slowed from the second quarter onward because of concerns about the economic outlook, but sales increased 5.9% for the cumulative period. Total overseas sales increased 33.2%. The company also began operations in Thailand in the first quarter.」

「Revenue from overseas operations, translated into yen, increased 126.5% year on year in Mainland China, reflecting the impact of COVID-19 in the same period of the previous year and contributions from newly opened stores. Revenue in Taiwan also increased 51.2%, due to the impact of COVID-19 in the same period of the previous year and new store openings in line with the multi-brand strategy.」

「Overseas sales, translated into yen, increased 32.3% year on year in mainland China as the impact of COVID-19 diminished from the previous year and stores opened in the previous year contributed. Sales in Taiwan increased 28.7% as the company continued opening stores in line with its multi-brand strategy, in addition to growth at existing stores. Sales in the United States increased 21.7% as the wholesale business performed steadily. Sales in Hong Kong increased 34.0% because of the rebound from the impact of COVID-19 in the previous year, and total overseas sales increased 27.3%.」

「At a meeting of the Board of Directors held on 19 October 2022, we resolved to establish an overseas subsidiary and established it on 3 January 2023 as described below. Under our medium-term management plan, we have positioned overseas operations as one of our key growth strategies. Southeast Asia is a priority region with a large young population and expected growth in the apparel market. We established a new company in Thailand, where fashion consumption is particularly strong, and will develop operations tailored to local customers, beginning with our core brand, “niko and ...”. After establishing a business base in Thailand, we will expand into neighboring Southeast Asian countries.」

「Overseas sales, translated into yen, declined 22.3% year on year in mainland China because of the impact of lockdowns resulting from the spread of COVID-19. Hong Kong was also affected by COVID-19 in the first quarter, but recovery in the second quarter and contributions from new stores resulted in a 5.0% increase in sales. Taiwan reported a 48.4% increase in sales following the successful rollout of new brands, while sales in the United States increased 53.2%, benefiting from strong luxury demand and e-commerce growth. Total overseas sales increased 27.4%, and the overseas business secured an operating profit.」

「In mainland China, where the company continued opening stores, the store network expanded by 4 stores from the previous year to 7 stores, and sales increased 28.0% year on year, supported by contributions from the new stores. Taiwan, which was less affected by COVID-19, reported a 28.1% increase in sales, while sales in the United States increased 59.8%, benefiting from strong demand and growth in e-commerce. Sales in Hong Kong declined 9.7% because of the spread of COVID-19, but total overseas sales increased 29.9%, and the overseas business secured an operating profit.」

「Overseas sales, translated into yen, totaled ¥8,981 million, up 20.4% year on year. Sales in mainland China increased 97.4% year on year, supported by the opening of the second niko and ... store in Shanghai. Hong Kong, which was less affected by the spread of COVID-19, reported higher sales and profit. In Taiwan, the economy slowed because of the renewed spread of COVID-19 through August, resulting in a slight decline in sales, but the company maintained higher sales and profit. In the United States, both directly operated stores and the wholesale business reported higher sales as the economy recovered, and the business returned to profitability.」

「China recorded a substantial 169.3% year-on-year increase in sales, helped by the opening of the niko and ... Shanghai 2nd store, while Hong Kong also recorded higher sales and profit as it was less affected by the spread of the novel coronavirus. In Taiwan, economic growth slowed as a result of the resurgence of infections from May onward, and although the growth rate moderated, the business maintained higher sales and profit.」

「Overseas sales, translated into yen, increased 196.9% year on year in China, supported by the opening of the second niko and ... store in Shanghai. Hong Kong and Taiwan, which were less affected by the spread of COVID-19, also reported higher sales and profit, and total overseas sales increased 18.4%.」

「Overseas net sales declined in Hong Kong, South Korea and the US due to the spread of COVID-19, while Taiwan, which was less affected, performed at roughly the previous year's level, and sales increased in China, where the niko and Shanghai flagship store performed steadily.」

「Overseas net sales declined in Hong Kong, South Korea and the US due to the spread of COVID-19, while Taiwan, which was less affected, performed at roughly the previous year's level, and sales increased in China, where the niko and Shanghai flagship store performed steadily.」

「Beginning with the niko and ... Shanghai flagship store, which opened in December 2019, we began building systems to respond accurately to the distinct preferences and lifestyles of customers in each country across all aspects of the business, including product development, merchandise planning and in-store presentation.」

「During the second quarter of the fiscal year, the newly established 愛徳利亜（上海）商貿有限公司 was included as a consolidated subsidiary.」

「Our China business has historically focused on the Collect Point multi-brand format, but to respond to the growth of the Chinese market and changes in customer needs, we decided to strengthen operations based on single-brand formats. Under this strategy, we plan to open a Shanghai global flagship store for niko and ..., one of our core brands, at the end of 2019. Through the new company, we will build a new structure to bring this strategy to success quickly and work to strengthen our business in the growing Asian market.」

「The Company will expand its operations overseas, including the development of its core brand niko and ... in China, with the aim of transitioning to a growth stage.」

「Overseas sales benefited from the contribution of sales following the consolidation of Velvet,LLC in the United States as a subsidiary in the previous fiscal year, while sales in Hong Kong and China declined due to the impact of restructuring those businesses. In particular, in the Hong Kong and China businesses, the Company steadily closed unprofitable stores in line with the business restructuring policy formulated in the previous fiscal year.」

「In China in particular, the company actively proceeded with closing unprofitable stores in line with the business restructuring policy formulated in the previous fiscal year.」

「For further growth, we believe it is necessary to review the business formats currently being operated and restructure the business based on the latest local market conditions.」