Store closures and procurement difficulties due to the spread of COVID-19

「While working to prevent the spread of infection, the Group is working to establish an appropriate management structure to minimise the impact on operating performance, including ① diverse and flexible work arrangements, ② thorough infection-prevention measures, ③ thorough production adjustments and inventory management and flexible product transfers, ④ securing alternative production sites and ⑤ liquidity measures and maintenance of financial soundness.」

「Although the impact of activity restrictions related to the infection had eased, procurement costs rose because of higher raw material prices and foreign exchange movements, and the challenging operating environment continued.」

「Although the seventh wave of COVID-19 spread, its impact eased compared with before, leading to a recovery in demand for going out and higher sales, resulting in increased revenue.」

「In the women's apparel specialty store industry, although there were no restrictions on activities due to the pandemic and its impact was smaller than before, procurement costs continued to rise amid a challenging operating environment due in part to higher resource prices, including raw materials, and foreign exchange factors associated with the yen's depreciation.」

「While working to prevent the spread of infection, the Group is working to establish an appropriate management structure to minimise the impact on operating performance, including ① diverse and flexible work arrangements, ② thorough infection-prevention measures, ③ thorough production adjustments and inventory management and flexible product transfers, ④ securing alternative production sites and ⑤ liquidity measures and maintenance of financial soundness.」

「In response to requests from governments and other authorities to prevent the spread of COVID-19, some stores were temporarily closed and some factories suspended operations. Fixed costs, including labour costs, incurred during the closure and suspension periods have been recognised as extraordinary losses attributable to COVID-19.」

「In response to requests from governments and other authorities to prevent the spread of COVID-19, some stores were temporarily closed and some factories suspended operations. Fixed costs, including labour costs, incurred during the closure and suspension periods have been recognised as extraordinary losses attributable to COVID-19.」

「In response to requests from governments and other authorities to prevent the spread of COVID-19, some stores were temporarily closed and some factories suspended operations. Fixed costs, including labour costs, incurred during the closure and suspension periods have been recognised as extraordinary losses attributable to COVID-19.」

「Meanwhile, in the second half, when the infection spread nationwide, store visitor numbers were affected by the suspension of Go To Travel and two declarations of a state of emergency. However, supported by the expansion of the e-commerce business and suburban stores, the company significantly outperformed the same period of the previous year, when economic activity had stagnated due to the pandemic.」

「However, during the accounting period for the third quarter, when the infection spread nationwide, the suspension of Go To Travel and the reissuance of the state of emergency further strengthened the mood of avoiding outings, resulting in fewer store visitors and performance below forecasts.」

「In the notes on additional information in the securities report for the previous consolidated fiscal year, under accounting estimates concerning the impact of the spread of COVID-19, the Group had assumed that the impact of COVID-19 on its business would gradually ease in the first half of the fiscal year ending May 2021 and normalise in the second half, and had made accounting estimates including impairment accounting for fixed assets and the recoverability of deferred tax assets. However, as the impact of COVID-19 has been prolonged at some stores, the assumption has been changed to one under which business activity will gradually recover in the second half of the fiscal year ending May 2021 and normalise in the fiscal year ending May 2022.」

「Although net sales got off to a strong start in June after the state of emergency was lifted, they declined slightly from July onward due to factors including a decrease in customer numbers associated with the resurgence of COVID-19 and a succession of periods of unsettled weather.」

「In the fourth quarter, operating results were materially affected as, following the declaration of a state of emergency, up to approximately half of the stores were closed and opening hours were shortened at almost all stores.」

「The infectious disease caused by the novel coronavirus, which originated in Wuhan, Hubei Province, China, has spread from across China to Japan and countries around the world. In Japan, the State of Emergency Declaration for COVID-19 took effect on 7 April 2020, and some stores operated by the Group in areas designated under the declaration, including Tokyo, were temporarily closed. If infections spread further in Japan, more stores may be forced to close or take other measures. The Group also imports products, including products developed in-house that it outsources for production to apparel manufacturers in Bangladesh, China and Vietnam, among other countries, as well as its own factory in Myanmar. If infections spread further in these countries, the Group's procurement activities may be disrupted. Accordingly, this matter may have a material impact on the Group's operating results and financial position.」