Country risks related to politics, laws and regulations in China and Hong Kong
First written in FY2021. 6 of 17 entries say "Mitigated", first in FY2022. Latest entry: FY2027-H1.
Tokyo Base moved to the "Worse" side of this theme in 2021.
2 other companies' latest entry also says "Mitigated".
- FY2027-H1MitigatedAnnual report
「In the China business, the withdrawal from unprofitable stores was completed by the end of the previous fiscal year, and management resources have been concentrated in Tier-1 cities, Shanghai, Beijing, Shenzhen and Guangzhou. As a result of concentrating personnel and product resources, same-store sales are recovering.」
Despite continued weak consumer sentiment and a cost-conscious mindset in China, sales at existing stores showed signs of recovery through the withdrawal from unprofitable stores and the concentration of resources in first-tier cities. - FY2026MitigatedAnnual report
「In the China business, we completed the withdrawal from unprofitable stores and reviewed our store-opening strategy, proceeding with openings in areas including Fumin Road in Shanghai. As a result, the number of stores at the end of the consolidated fiscal year was 8, and the operating profit margin recovered to negative 6.6%, up 19.2 percentage points year on year. No impact from sluggish consumption in the Chinese market due to political factors was observed.」
In the China business, we proceeded with the withdrawal from unprofitable stores and reopened stores in priority areas, improving the operating profit margin. - 2026-03-17MitigatedEarnings forecast revision
「In China, we have not observed any impact from sluggish consumption or other factors attributable to the political environment.」
The disclosure changed to state that no impact from politically driven sluggish consumption had been observed in China. - FY2026-H1MitigatedAnnual report
「Although consumer spending in mainland China remains limited, we have captured solid demand in the cities where we operate and our regrowth strategy is progressing smoothly. We have reduced the business to 6 stores in 4 first-tier cities, Shanghai, Beijing, Shenzhen, and Guangzhou. As a result of concentrating personnel and product resources, sales at existing stores are showing signs of recovery.」
With consumer spending limited across China, we advanced the recovery of existing stores and our regrowth strategy by concentrating on 4 first-tier cities and consolidating personnel and product resources. - FY2025The coexistence of a smaller China store footprint and improvement at existing storesAnnual report
「In the China business, we withdrew from unprofitable stores to improve profitability, reducing the number of stores to 6 at the end of the consolidated fiscal year, down 6 from the beginning of the year. As a result, sales declined 37.4% year on year, while sales at existing stores increased 14.3%.」
In the China business, the number of stores and sales were reduced against a backdrop of country risks and sluggish consumer spending, while sales at existing stores increased 14.3% year on year. - FY2025-H1The coexistence of a smaller China store footprint and improvement at existing storesAnnual report
「In the China business, the number of stores stood at 8 at the end of the interim period as the company proceeded with the withdrawal from unprofitable stores, down 9 stores from the same period of the previous year. As a result, revenue declined 35.5% year on year, while same-store sales increased 10.7% year on year.」
Against a backdrop of weaker consumer spending in China, the number of stores was reduced to 8 and sales declined 35.5%, while sales at existing stores increased 10.7%. - FY2025-Q1The coexistence of restructuring in the China business and economic slowdownAnnual report
「There are concerns about the impact on economic conditions from the slowdown in the Chinese and European economies. In the China business, sales declined following the withdrawal from 13 unprofitable stores in the previous fiscal year.」
The report cites concerns about a slowdown in the Chinese economy and lower sales resulting from the withdrawal from 13 unprofitable stores in China in the previous fiscal year. It also describes structural reform through concentrating the China business in first-tier cities. - FY2024WorsenedAnnual report
「In mainland China, although a temporary recovery trend was observed after the zero-COVID policy was lifted, consumer spending remained sluggish amid an uncertain outlook due to factors including deterioration in the property market. China (overseas): 9 stores, ¥238.779 million.」
In China, the temporary recovery after the policy was lifted gave way to sluggish consumer spending, and impairment losses of ¥238.779 million were recorded on 9 stores. Demand and store-profitability risks in the China business continued to materialize. - FY2024-Q2Consumer stagnation and store closures continued after China's policies were liftedAnnual report
「In mainland China, some recovery was observed after the zero-COVID policy was lifted, but consumer spending stagnated amid an uncertain outlook due to factors including deterioration in the property market. The main factor was impairment losses associated with withdrawing from some regions and commercial facilities through the Chinese local subsidiary.」
Although some recovery was seen after the zero-COVID policy was lifted, consumer spending stagnated due to factors including deterioration in the property market, while the Chinese subsidiary withdrew from multiple stores and recorded impairment losses of ¥25.264 million. - FY2024-Q1The recovery of the China business coincided with lower sales caused by the sharp increase in infectionsAnnual report
「In mainland China, sales in January and February declined year on year because infections rose explosively from the lifting of the zero-COVID policy through early January 2023, while in the previous year the impact of COVID-19 began expanding in some regions from February 2022.」
Even after the zero-COVID policy was lifted, sales in mainland China in January and February fell below the previous year because of the explosive increase in infections. At the same time, the report noted that people flows were trending upward after restrictions on activity were lifted, indicating the coexistence of recovery and risk. - FY2023WorsenedAnnual report
「Our Chinese subsidiary was significantly affected by COVID-19 throughout the year. Most recently, the number of store visitors declined as infections rose explosively from the lifting of the zero-COVID policy in December 2022 through early January 2023.」
In mainland China, in addition to the impact of the zero-COVID policy, the sharp increase in infections after the policy was lifted reduced store traffic, resulting in a concrete impact on the business in the form of the subsidiary's ordinary loss of ¥922.622 million and net loss of ¥1,344.004 million. - FY2023-Q2WorsenedAnnual report
「In mainland China, the zero-COVID policy was strengthened through measures including the lockdown in Shanghai, affecting business activity through stagnant people flows, lower consumer activity, and damage to supply chains.」
China's mainland zero-COVID policy was strengthened, and the stagnation of people flows, decline in consumer activity, and damage to supply chains caused by the Shanghai lockdown emerged as country risks for the overseas business. - FY2023-Q1WorsenedAnnual report
「COVID-19 has affected business activity not only in Japan but also in mainland China and Hong Kong through the zero-COVID policies, which have reduced the flow of people, weakened consumer activity, and disrupted supply chains.」
The stagnation of people flows, decline in consumer activity, and impact on supply chains caused by the zero-COVID policies in mainland China and Hong Kong emerged and intensified as risks related to our overseas operations. - FY2022MitigatedAnnual report
「As a group, we will continue gathering information on the various risks in the countries where we operate, monitor developments closely, and take appropriate measures.」
We presented measures to address country risks related to laws and regulations, political and economic events, and other factors in China and Hong Kong by continuing to gather information and monitor developments. - FY2021MaterialisedAnnual report
「Our group operates in China and Hong Kong, and our results could be affected by unexpected changes in laws and regulations, political or economic events that adversely affect our group, or social disruption caused by terrorism, conflict, natural disasters, or other factors. During the consolidated fiscal year, weak sales caused by political instability in Hong Kong continued, and we took measures including closing 2 unprofitable stores to reduce the size of the loss.」
We identified changes in laws and regulations, political and economic events, and social disruption in China and Hong Kong as a standalone country risk, and cited weak sales caused by political instability in Hong Kong and the closure of 2 stores as actual impacts.