Renewed Growth of Existing Brands and Stores

「During the current interim consolidated accounting period, the company worked to improve the accuracy of product planning, merchandise planning, procurement and sales in the apparel business, and pursued a transition to a leaner, more profitable business structure without seeking sales volumes beyond its capabilities.」

「During the current consolidated fiscal year, some apparel brands struggled throughout the year because their merchandise planning failed to fully capture customer needs in terms of both volume and quality during the spring/summer selling season, compounded by delays in switching products from summer to fall. This offset the profit growth generated by strong lifestyle brands. To resolve these issues and fundamentally reform the earnings structure, from the next fiscal year the company will reorganize and consolidate management administration and brand operating functions under World Brands Co., Ltd., which oversees the B2C business. By integrating capital and functions, it aims to accelerate decision-making and advance initiatives such as improving apparel merchandise planning.」

「During the current interim consolidated accounting period, some apparel brands struggled in the spring/summer selling season because their merchandise planning failed to fully capture customer needs in terms of both volume and quality, while challenges in switching to the hot-weather fall season offset the strong performance of lifestyle brands. The Brand Business Division, established in March 2025, has begun reform and improvement initiatives for the brands facing challenges in the mid-upper and mid-lower segments.」

「Although some store openings were postponed to the following fiscal year, the company finally achieved a net increase in stores and established a position from which they can contribute to future growth and earnings.」

「During the current interim consolidated accounting period, some brands struggled to balance inventory reduction and gross profit protection during the spring/summer selling season, partly because product valuation loss rules were applied quarterly rather than semiannually. Overall, however, the brand business made steady progress in both earnings and cash generation, supported by strong EC sales and other factors. As a result, the brand business reported revenue of ¥96.592 billion, up 6.5% year on year, including external revenue of ¥92.913 billion, up 6.7%, and core operating profit, or segment profit, of ¥5.086 billion, up 27.7%, resulting in higher revenue and profit.」

「As a result, the brand business reported revenue of ¥50.940 billion, up 7.8% year on year, including external revenue of ¥49.117 billion, up 7.4%, and core operating profit, or segment profit, of ¥4.555 billion, up 3.8%, resulting in higher revenue and profit.」

「In fact, same-store sales exceeded the previous year for 22 consecutive months through December 2023.」

「During the first half of the current fiscal year, the return of customer traffic to physical stores made the recovery and growth of store-channel earnings more evident. Most brands reported higher revenue than in the same period of the previous year, while improvement was particularly pronounced among mid-lower brands in terms of profit.」

「During the first quarter of the current fiscal year, the return of customer traffic to physical stores made the recovery and growth of the store channel more evident, with department-store brands in particular posting substantial double-digit revenue growth. The consolidation of Strasburgo Co., Ltd., mentioned above, also contributed to revenue growth in the brand business segment. As a result, the brand business reported revenue of ¥46.389 billion, up 5.6% year on year, including external revenue of ¥45.681 billion, up 5.8%, and core operating profit, or segment profit, of ¥4.448 billion, up 2.5%, resulting in higher revenue and profit.」

「Through these initiatives, the company will maintain its basic policy of not pursuing sales without profit and seek same-store sales above 100% of the previous year while limiting discount sales.」

「As a result, the brand business reported revenue of ¥136.230 billion, up 28.0% year on year, including external revenue of ¥133.772 billion, up 28.7%, and core operating profit, or segment profit, of ¥9.959 billion, up 207.8%, resulting in higher revenue and profit.」

「During the first half of the current fiscal year, the company was able to capitalize on business opportunities without venue closures or activity restrictions for the first time in 3 years. Strong EC sales also continued, helped by the rollout of successful OMO initiatives from certain brands across the business, while the consolidation of Narumiya lifted earnings. These factors more than offset the revenue impact of brand closures and other measures implemented by the end of the first half of the previous fiscal year, enabling substantial revenue growth while maintaining a focus on full-price sales.」

「As a result, the brand business reported revenue of ¥43.923 billion, up 27.7% year on year, including external revenue of ¥43.184 billion, up 28.0%, and core operating profit, or segment profit, of ¥4.338 billion, up 246.2%, resulting in higher revenue and profit.」

「Against this backdrop, apparel brands continued from the previous consolidated fiscal year to pursue profitability-focused sales centered on full-price merchandise across both physical stores and e-commerce, working to improve earnings power through higher gross margins. In addition, after the state of emergency was lifted in October, same-store sales at department-store women's brands such as "INDIVI" grew by double digits year on year across the board, and nearly all brands posted growth, resulting in a stronger recovery than in the first half.」

「Against this backdrop, apparel brands continued from the previous fiscal year to pursue profitability-focused sales centered on full-price merchandise across both physical stores and e-commerce, working to improve earnings power through higher gross margins. In addition, after the state of emergency was lifted in October, same-store sales at department-store women's brands such as "UNTITLED" and "INDIVI" grew by double digits year on year across the board, and nearly all brands posted growth, resulting in a stronger recovery than in the first half.」

「Against this backdrop, apparel brands continued from the first quarter to pursue profitability-focused sales centered on full-price merchandise across both physical stores and e-commerce, working to improve earnings power.」

「Against this backdrop, apparel brands focused on profitability during the first quarter of the current fiscal year by pursuing full-price sales across both physical stores and e-commerce, seeking to improve earnings power. In particular, while the company struggled to recover customer numbers mainly at urban department stores and locations around stations and terminals that had previously attracted large numbers of customers, signs of recovery began to emerge, including steady sales at "SHOO・LA・RUE," which is primarily operated in neighborhood shopping centers.」

「Against this backdrop, the company began and has been advancing structural reform and a policy of "selection and concentration" in its core apparel business.」

「Regarding growth, one of its key challenges, the company has been promoting branding, CRM and digital promotion as part of a return to the roots of its brand business. Although some initiatives have produced successful results, the overall effort remains a work in progress, and the brand business struggled during the third quarter of the current fiscal year.」

「Through these initiatives, the company aims to raise same-store sales as a percentage of the previous year from the 97% recorded in the fiscal year ended March 2019 to 100% going forward, while maintaining its basic policy of not pursuing sales without profit.」

「In the brand business, each operating company will continue working to optimize its brands for their respective markets, improve product strength and sales capabilities, and drive renewed growth in existing brands and stores.」

「As a key priority, we worked to renew the growth of existing brands and stores by strengthening product and sales capabilities to improve profitability.」