Risks from changes in consumer preferences, economic conditions, competitors and the market

「国内ファッション市場はオーバーストア/ブランドの供給過剰が10年以上続く状態にあり、ブランド価値を活かしきれずに、持続困難となるケースも増加しています。」

「In Japan’s apparel market, uncertainty in sales trends is increasing as the market matures amid population decline and the declining birthrate and aging population, compounded by climate-related factors such as the prolonged record heat of recent years. In addition, competition continues to intensify, accompanied by the elimination of players, including companies from other industries and foreign-capitalized companies, as digitalization and AI technology advance rapidly.」

「During the interim consolidated accounting period, there were no new business or other risks, nor any material changes to the business or other risks described in the annual securities report for the previous fiscal year.」

「During the cumulative first-quarter consolidated period, there were no new business or other risks, nor any material changes to the business and other risks described in the securities report for the previous fiscal year. With respect to the spread of the novel coronavirus disease (COVID-19), there is currently no clear prospect of containment, and various effects have become apparent not only in Japan but worldwide.」

「COVID-19, which has continued since the year before last, has changed consumers’ lifestyles and purchasing behavior and is expected to have a major impact on future competitive advantages. It has also caused a global container shortage and continued increases in procurement costs due to lockdowns overseas. In addition, severe global damage, including surging raw material prices due to heightened tensions between Russia and Ukraine, is expected to prolong the challenging market environment.」

「Revenue has declined due in part to the discontinuation of brands and store closures associated with structural reform. In addition, restrictions on the movement and activities of people in response to the continued spread of COVID-19 and other factors, as well as weak consumer sentiment, continue to make it difficult to secure sales, primarily through stores.」

「In addition to the expected impact of large-scale store closures associated with structural reform, weak consumer sentiment caused by people refraining from going out following the continuous issuance of states of emergency and the rapid spread of the Delta variant persisted for longer than expected.」

「Revenue got off to a solid start in early April as rising temperatures supported the launch of spring apparel, but the recovery trend gradually slowed as the resurgence of COVID-19 became more severe. In particular, store closures and shortened operating hours at commercial facilities following the issuance of states of emergency in some regions during the long holiday period in the second half of April impeded the recovery, and sales remained sluggish throughout May.」

「Revenue declined substantially due to temporary store closures associated with the spread of the novel coronavirus and lower demand for clothing worn outside the home amid fewer opportunities to go out.」

「Revenue declined substantially due to temporary store closures associated with the spread of the novel coronavirus and lower demand for clothing worn outside the home amid fewer opportunities to go out.」

「The state of emergency was subsequently lifted in stages from mid-May, and all stores resumed operations on 3 June. Store sales recovered strongly at a faster-than-expected pace. However, from July onward, the spread of infections again made the timing of containment uncertain, and customer traffic remained slow to return, particularly at station buildings and department stores in central urban areas, which had originally attracted substantial customer traffic.」

「With respect to the spread of the novel coronavirus disease (COVID-19), there is currently no clear prospect of containment, and various effects have become apparent not only in Japan but worldwide. Depending on how the situation develops, it may affect the business of our group.」

「Revenue was sluggish, particularly for heavy clothing, due to the continued overall trend toward restrained consumption since the consumption tax increase in October, store closures caused by natural disasters, and the effects of a record warm winter.」

「The business environment surrounding our group is expected to remain challenging. In addition to declining volumes resulting from population decline and the declining birthrate and aging population, the domestic apparel market is maturing and unit prices are falling, while processing costs in overseas production locations and procurement costs due to foreign exchange fluctuations are rising. Expenses such as labor and logistics costs are also increasing because of labor shortages.」

「Going forward, the spread of protectionism centered on the United States and the resulting stagnation of the global economy, among other factors, may adversely affect Japan’s economic conditions. In addition, the consumption tax rate increase scheduled for October 2019 may negatively affect personal consumption and have a material impact on the earnings of our group.」

「In addition to factors such as sluggish personal consumption caused by economic fluctuations and market changes resulting from competition with other companies, changes in consumer preferences caused by shifting fashion trends could affect the Group’s business results.」

「However, in addition to factors such as sluggish personal consumption caused by economic fluctuations and market changes resulting from competition with other companies, changes in consumer preferences caused by shifting fashion trends could affect the Group’s business results, particularly in its fashion business centred on apparel, fashion accessories and lifestyle goods.」

「If consumer preferences change as fashion trends evolve, this could affect the performance of our Group.」