Conversion of Retail Facilities in Saturated Markets to Real Estate Operations

「At certain stores, we compared current earnings with the future cash flows from conversion to a real estate rental business and converted those for which conversion was deemed more rational to real estate rental businesses.」

「By reviewing the utilization of assets held, we will secure stable earnings by converting facilities for which conversion to a real estate business is more rational. For properties with a high likelihood of generating capital gains, we will acquire them as properties for sale, enhance their value and sell them reliably to secure earnings.」

「In August 2024, after comparing current earnings with the future cash flows from conversion to a real estate rental business and determining that conversion was more rational, the company decided to close the Decore Kawauchi and Decore Wakimachi stores (Mima, Tokushima Prefecture) and」

「In addition, the Alex Comfort Ikoramo-ru Izumisano store (Izumisano, Osaka Prefecture) was closed in March of the same year.」

「In addition, for the Our Liquor Aizumi store (Itano District, Tokushima Prefecture), we compared current earnings with the future cash flows from conversion to a real estate rental business, determined that conversion was more rational and closed the store in January 2024.」

「At the Charlie Komatsushima store (Komatsushima, Tokushima Prefecture), we compared current earnings with the future cash flows from conversion to a real estate rental business, determined that conversion was more rational and converted the store to a real estate rental business in January 2023.」

「As part of structural reform, revenue from the Decore Okinohama and Charlie Anan stores, which had been converted to real estate rental businesses, began to be recognized in full, resulting in increases in segment revenue, gross profit and segment profit.」

「As part of structural reform, revenue from the Decore Okinohama and Charlie Anan stores, which had been converted to real estate rental businesses, began to be recognized in full, resulting in increases in segment revenue, gross profit and segment profit.」

「In addition to stable revenue from existing tenants, the partial recognition of revenue from the Decore Okinohama and Charlie Anan stores, which had been converted to real estate rental businesses as part of structural reform, resulted in higher segment revenue and gross profit. However, repair expenses associated with the conversions prevented segment profit from increasing. As a result, revenue was ¥373 million, up 14.6% from the same quarter of the previous year, and segment profit was ¥99 million, down 7.3%.」

「As part of structural reform, revenue from the Decore Okinohama and Charlie Anan stores, which had been converted from retail facilities to real estate rental businesses, began to be partially recognized, resulting in higher segment revenue. However, repair expenses associated with the conversions prevented segment profit from increasing. As a result, revenue was ¥242 million, up 12.4% from the same quarter of the previous year, and segment profit was ¥77 million, down 15.6%.」

「As part of structural reform, revenue from the Decore Okinohama and Charlie Anan stores, which had been converted from retail facilities to real estate rental businesses, began to be partially recognized, resulting in higher segment revenue. However, repair expenses associated with the conversions prevented segment profit from increasing. As a result, revenue was ¥120 million, up 12.4% year on year, and segment profit was ¥34 million, down 21.1%.」

「In addition to converting the site of the Decore Okinohama store to a real estate business, some product categories were relocated to YAMASHIRO TERRACE, a mixed-use facility newly established in March 2020 as part of the development near the adjacent head office building, and the site was reopened after renovation as Decore GREEN, earth café and GoGoBIKE.」

「As part of structural reform involving changes to certain businesses, during the six-month period ended the second quarter of the current fiscal year, the Charlie Anan store (Anan, Tokushima Prefecture) was closed in October 2019, and the Decore Okinohama store (Tokushima, Tokushima Prefecture) was closed in December of the same year. In addition, for the Decore Okinohama store, in addition to converting the site to a real estate business, some product categories were relocated to a newly established mixed-use facility developed near the adjacent head office building」

「As part of structural reform resulting from changes to certain businesses described above, the チャーリー阿南店 store in Anan, Tokushima, was closed in October 2019 during the first quarter of the consolidated period under review.」

「For facilities in regions where the retail market has become saturated as the supply-demand balance has changed, we will compare current earnings with the future cash flows from conversion to a real estate business, taking local real estate market conditions into consideration. Facilities for which conversion to a real estate business is deemed more rational will be converted accordingly.」