Store Network Scrap-and-Build and Format Conversion

「In its store opening and closure policy, the Company will pursue strategic scrap-and-build initiatives, focus on maximizing customer lifetime value rather than expanding the number of stores, and strengthen its earnings base by improving productivity per employee.」

「In Japan, the Company operated 78 stores as of 31 August 2024, mainly in department stores and shopping centers, while also conducting businesses including e-commerce, wholesale and services for affluent customers.」

「Although the number of stores at the end of the fiscal year declined by 3 from the end of the previous fiscal year, domestic same-store sales increased 5.9% year on year as the Company focused on improving productivity per store, including through the closure of unprofitable stores and relocations and renovations.」

「In addition to the number of stores at the end of the third quarter being down 6 from the end of the same quarter of the previous year」

「Sales declined by ¥281 million, or 5.9%, year on year, due in part to sluggish bridal jewelry sales and a 4-store reduction from the end of the same quarter of the previous year as store rationalization progressed.」

「Store rationalization reduced the number of stores by 7 from the end of the same quarter of the previous year.」

「With respect to store expansion, the total number of stores at the end of the consolidated accounting period was 88, comprising 79 domestic stores and 9 overseas stores, all 9 of which were in Taiwan, down 8 from the end of the previous fiscal year.」

「The number of stores at the end of the cumulative third-quarter period was down 5 from the end of the same quarter of the previous year. In addition, as a result of the states of emergency declared in January and April 2021, as many as 38 stores were closed, although the closure periods and affected regions were limited compared with the state of emergency declared in April 2020,」

「As a result of these initiatives, sales declined by ¥354 million, or 6.9%, year on year. In addition to the number of stores at the end of the cumulative second-quarter period being 8 lower than at the end of the same quarter of the previous year, a major factor behind the decline in sales was a substantial decrease in customer traffic, particularly at department stores, due to the impact of COVID-19.」

「With respect to its store strategy, while adopting a policy of generally freezing new store openings amid the COVID-19 pandemic, the Company continued negotiating rent reductions and waivers for existing stores and, where necessary, requested store closures, pursuing higher rent efficiency and fixed-cost reductions. In light of the accelerated digitalization of society and the economy triggered by the response to COVID-19, the Company made the major decision to close Festaria Bijou Sophia Ginza (Ginza flagship store), formerly positioned as its flagship store, on 25 December 2020 as part of its efforts to build a new business model.」

「As part of these initiatives, the Company decided to close 10 stores with poor profitability due to declining customer traffic at commercial facilities and elsewhere. It will reduce fixed costs, mainly store-related expenses, strengthen human resources management and seek to improve productivity per store and per employee.」

「In the domestic retail business, the Company began implementing temporary closures and reduced operating hours in stages from late March 2020. From the issuance of the state of emergency declaration in April 2020 until its lifting in late May 2020, nearly all stores were closed. In addition, planned exhibitions and events were cancelled one after another, significantly restricting business activities. As a result, sales for the third-quarter consolidated accounting period (1 March 2020 to 31 May 2020) fell sharply, down 49.0% year on year. From June 2020, although some stores continued to operate on reduced hours, all stores resumed operations, and sales at physical stores have been recovering rapidly, particularly in bridal-related businesses.」

「As part of its store strategy to strengthen existing channels, the Company opened SAKURA MACHI Kumamoto (Kumamoto Prefecture) in September 2019; LaLaport Numazu (Shizuoka Prefecture), JR Kyoto Isetan (Kyoto Prefecture) and Daimaru Kobe (Hyogo Prefecture) in October; and Grandberry Park Minami-Machida (Tokyo) in November. As a result, the number of domestic stores at the end of the cumulative first-quarter period was 91, an increase of 3 from the end of the same quarter of the previous year.」

「As a result, during the fiscal year, the Company opened 9 domestic stores, closed 6 and converted 17 to different formats. The number of domestic stores increased by 3 from the end of the previous fiscal year to 87.」

「As a result, during the cumulative third-quarter period, the company’s domestic store rollout comprised 7 new openings, 5 closures and 16 format changes, increasing the number of domestic stores by 3 from the end of the same quarter of the previous year to 86.」

「To strengthen its store strategy, the company promoted openings in leading commercial facilities and the relocation and expansion of sales floor space, while revitalising existing stores through brand consolidation and integration and rigorously withdrawing from unprofitable stores, seeking to improve management efficiency and store productivity. As a result, during the cumulative second-quarter period, its domestic store rollout comprised 5 new openings, 4 closures and 13 format changes, increasing the number of domestic stores by 3 from the end of the same quarter of the previous year to 85.」

「To strengthen its store strategy, the company opened stores in favourable locations at leading commercial facilities in Japan, including Lalaport EXPO CITY (Osaka Prefecture) in September 2018, Celeo Hachioji (Tokyo) and FKD Interpark (Tochigi Prefecture) in October, and Mitsui Outlet Park Iruma (Saitama Prefecture) in November. As a result, the number of domestic stores at the end of the cumulative first-quarter period increased by 6 from the end of the same period of the previous year to 88.」

「Regarding the implementation of structural reform, amid increasing regional and income polarisation, the company proactively pursued store policies to strengthen existing businesses. It opened stores in commercial facilities with strong customer-drawing power while closing unprofitable stores, and sought to improve store efficiency by expanding sales floor space, particularly at leading department stores. These initiatives produced a certain level of results.」

「Under its store policy, the company opened Lalaport Fujimi (Saitama Prefecture) on 9 March 2018 and Lalaport Ebina (Kanagawa Prefecture) on 23 March 2018, following the openings of Takasaki OPA on 13 October 2017 and Youme Town Saga on 1 November of the same year. It also expanded sales floor space at leading department stores and shopping centres, including Sogo Yokohama (Kanagawa Prefecture) and Amu Plaza Oita (Oita Prefecture) on 2 March 2018, Lazona Kawasaki Plaza (Kanagawa Prefecture) on 20 March, and Sogo Chiba (Chiba Prefecture) on 1 May, driving higher revenue.」

「As a result, in addition to achieving an expansion in sales floor space at leading department stores through synergies with its store restructuring policy,」

「For its store rollout, the company opened Takasaki OPA (Gunma Prefecture) in October 2017 and Youme Town Saga (Saga Prefecture) in November of the same year. As a result, the number of domestic stores at the end of the cumulative first-quarter period was 82, a decrease of 2 from the end of the same period of the previous year.」

「Regarding the “elimination of unprofitable divisions,” the company sought to improve store efficiency by optimising its business portfolio as part of an initiative based on future prospects, including transferring its founding eyewear business and closing 10 stores.」

「The company opened Festaria Voyage Nagoya Parco on 17 March 2017, seeking to promote brand awareness and improve profitability through an opening in a leading commercial facility. At the same time, it pursued initiatives to improve store efficiency by optimising its business portfolio, including transferring its eyewear business and closing unprofitable stores. As a result, domestic same-store sales increased 2.3% year on year.」

「For existing businesses, in its store rollout in core areas, the company closed unprofitable stores and transferred its eyewear business as part of its selection and concentration of businesses. As a result, the number of stores operated by the group at the end of the cumulative second-quarter period decreased by 5 from the end of the same period of the previous year to 87, including 6 overseas stores, a decrease of 1 overseas store.」

「As part of this store policy, as announced in the “Notice Regarding Business Transfer” released on 24 October 2016, the company decided to transfer its eyewear business in order to concentrate management resources on its core jewellery business. During the cumulative first-quarter period, it closed 4 stores, including other unprofitable stores. For new openings, it opened Lalaport Shonan Hiratsuka (Kanagawa Prefecture) and Sogo Chiba (Chiba Prefecture) in October 2016, followed by Celeo Kokubunji (Tokyo) in November of the same year. As a result, the number of domestic stores at the end of the cumulative first-quarter period was 84, a decrease of 3 from the end of the same period of the previous year.」

「The company will rigorously implement a more focused selection of businesses and stores, withdrawing from stores and businesses with no prospects for growth or improvement. It will then concentrate and reallocate management resources to the businesses, stores and personnel that should receive priority, seeking to raise profitability.」

「Stepping up store network restructuring and format changes」