Business Continuity Risk Due to COVID-19

「During the first nine months of the current consolidated fiscal year, Japan’s economy continued to show gradual recovery as social and economic activity normalized further and lodging, food services, and inbound demand expanded, despite the effects of greater household thrift due to rising prices and the slowdown in overseas economies.」

「Since the easing of border-control measures last October, the number of international visitors to Japan has increased. In addition, with COVID-19 classified as a Category 5 infectious disease from 8 May, social and economic activity moved further toward normalization, and personal consumption also showed signs of recovery, resulting in continued gradual recovery.」

「Entering fiscal 2023, COVID-19 was reclassified under the Infectious Diseases Act as a Category 5 infectious disease, the same category as seasonal influenza, and border-control measures for international travelers were lifted. Restrictions on economic and social activity caused by the pandemic have therefore been eased in stages, and Japan is steadily transitioning into the post-pandemic period, in which economic conditions are no longer dictated by infection levels.」

「During the first nine months of the current consolidated fiscal year, Japan’s economy continued to show signs of recovery, despite the effects of COVID-19 and supply constraints on corporate activity, as well as the increasingly pronounced impact of rising prices.」

「During the first six months of the current consolidated fiscal year, Japan’s economy showed signs of recovery despite the effects of COVID-19, supply constraints on corporate activity, and rising prices.」

「During the first quarter of the current consolidated fiscal year, Japan’s economy showed signs of recovery as the effects of COVID-19 gradually eased and economic and social activity moved toward normalization.」

「Although personal consumption turned positive year on year, it remained mixed because of the effects of restrictions on the movement of people during the spread of COVID-19.」

「In the department store and SC businesses, sales began to trend upward after the second state of emergency was lifted. However, the spread of COVID-19 gradually became more serious in April, and following the third declaration of a state of emergency in late April, stores in the Tokyo metropolitan and Kansai areas had to suspend operations or reduce their hours, resulting in a significant deterioration in performance. In May, the extension of the state of emergency and expansion of the areas covered placed us in an even more difficult situation.」

「Recently, the third state of emergency was declared, and commercial and other customer-attracting facilities in the affected areas were asked to close to significantly reduce human mobility, resulting in an extremely challenging operating environment that continues.」

「The retail industry showed some recovery after the state of emergency issued on 7 April 2020 was lifted, helped by the resumption of economic activity and the Go To campaign. However, the outlook remains uncertain, weighed down by a renewed increase in infections and declining wages.」

「The department store and PARCO businesses, which are the core businesses of our Group, were significantly affected by the disappearance of inbound consumption due to the spread of COVID-19 and the need to voluntarily suspend store operations following the April declaration of a state of emergency.」

「In the department store business, personal consumption stagnated and inbound consumption disappeared in March amid calls to refrain from nonessential and nonurgent outings. In April, following the declaration of a state of emergency, we voluntarily suspended operations at almost all stores, resulting in a significant deterioration in performance.」

「With the emergence of COVID-19 as a “black swan” (an unpredictable event with a major impact when it occurs), our Group is facing a crisis so severe that its survival is at risk.」