Product-response risk from intensifying competition, changing trends and economic deterioration

「AZUL BY MOUSSY, our core brand accounting for approximately 30% of domestic sales, experienced declining customer traffic throughout the year and was the main factor behind the overall decrease in sales.」

「The decline in customer traffic at AZUL is the main factor pushing down consolidated sales.」

「However, new products from AZUL BY MOUSSY failed to gain traction, and sales were below the prior-year period.」

「Store sales struggled, reaching 94.3% of the prior-year level, as sales of spring outerwear failed to gain momentum.」

「The specialty apparel retail industry to which our group belongs faces intense competition from domestic and overseas competitors. Trends and consumer preferences change rapidly, and products tend to have short life cycles. If we are unable to offer products that respond to changes in customer preferences, or if a sharp economic downturn significantly reduces consumers' willingness to purchase, this may affect our group's results.」

「In response to these risks, our group will endeavor to accurately identify customer needs through analysis of EC members and daily communication between frontline employees and customers, promptly reflect those needs in our merchandise, and provide products accordingly.」

「The specialty casual-wear retail industry to which our group belongs faces intense competition from domestic and overseas competitors. Trends and consumer preferences change rapidly, and products tend to have short life cycles. If we are unable to offer products that respond to changes in customer preferences, or if a sharp economic downturn significantly reduces consumers' willingness to purchase, this may affect our group's results. As a response, we will introduce a business digitalization platform and work to improve the accuracy of product planning and ordering.」

「At the fashion-building and station-building brands, sales growth was challenging because, in addition to the previously mentioned impact of the consumption tax increase and seasonal factors, a shortage of hit products that outperformed the previous year also had an effect.」

「Affected by a shortage of hit products that outperformed the previous year, domestic same-store sales for the cumulative period were below the prior-year level.」

「Overall, the challenging consumer environment continues, with consumers remaining frugal amid stagnant real income growth and continuing to show a preference for selective purchasing.」

「The casual-wear specialty-store industry to which we belong is expected to remain in a difficult operating environment because of increasingly diverse consumer purchasing behavior and a stronger preference for saving.」

「The business environment surrounding our group is expected to remain challenging in terms of sales, as competition intensifies amid population decline and the progression of an aging society in Japan, as well as increasingly diverse consumer needs and a preference for lower prices.」

「The specialty casualwear retail industry in which our Group operates faces intense competition from domestic and overseas competitors. Trends and consumer preferences change rapidly, and product life cycles tend to be short. If we are unable to offer products that respond to changes in customer preferences, or if a sharp economic downturn significantly reduces consumers’ willingness to purchase, this could affect the Group’s business results.」