Risk of Business Interruption Due to Extreme Weather, Natural Disasters, and Infectious Diseases

「災害常態化への適合」

「Both companies had stores damaged in the Kumamoto Earthquake, which recorded a maximum seismic intensity of 7.」

「However, if abnormal weather conditions caused by extreme weather, global warming or other factors, or unpredictable changes in weather conditions such as typhoons and torrential rain, occur, or if earthquakes and resulting tsunamis, power shortages, wind and flood damage, lightning or other unforeseen natural disasters, pandemics, sudden accidents, fires, terrorist acts, infrastructure disruptions, IT system failures or cyberattacks cause」

「Specifically, in the brand business, sales of certain apparel brands struggled during the spring/summer selling season, and preparations for the hot autumn season, made in response to the previous year's experience, also resulted in delays in switching products from summer items. Consequently, core operating profit, the earning power of the core business, fell short of plan. The Group sincerely recognizes that this left issues in both the quality and quantity of its responses to climate change, the accuracy of its merchandise planning, and its control of production and sales.」

「In revenue, store sales consistently exceeded the same period of the previous year, led by apparel, as economic and social activity normalized following the reclassification of COVID-19 to Category V and demand for going out and urban customer traffic continued to recover.」

「Some effects of climate change have become apparent, and climate change may adversely affect the Group's operating results and financial condition.」

「Although COVID-19 spread again intermittently in a seventh wave from July onward and an eighth wave from November onward, store sales generally continued to grow substantially year on year.」

「Although the renewed spread of COVID-19 in July and the negative impact of a typhoon making landfall in September affected the business, store sales grew substantially year on year.」

「There were no declarations of a state of emergency or similar measures related to COVID-19 throughout the first quarter, and the Golden Week holiday was the first in 3 years without commercial facility closures or reduced operating hours. As people flows recovered, demand for going out recovered in both apparel and miscellaneous goods.」

「During the first half, customer traffic remained low as consumer sentiment weakened because people refrained from going out amid the prolonged state of emergency and the sharp increase in COVID-19 cases. In the third-quarter accounting period, however, customer traffic recovered against the backdrop of the lifting of the state of emergency and favorable weather and climate conditions.」

「From late April, the reissuance of a state of emergency led to a succession of closures and reduced operating hours at the commercial facilities in which the Group's stores are located, and declining consumer sentiment made the decrease in customer numbers at operating stores particularly pronounced. From July onward, sales lacked momentum overall, and amid a sharp increase in new cases of COVID-19 caused by the Delta variant from late July, customer numbers fell mainly in areas under a state of emergency, with customer traffic slowing across almost the entire country by the latter half of August.」

「In particular, from the long holiday period in the latter half of April, closures of commercial facilities and reduced operating hours accompanying the declaration of a state of emergency in some regions hampered the recovery, and sales remained sluggish throughout May.」

「Infections have continued to spread again repeatedly since July, and customer traffic has remained sluggish, particularly at station buildings and department stores in central urban areas, which had previously attracted large numbers of customers.」

「As of the end of April, 2,227 directly operated stores, representing approximately 9% of the Group's directly operated stores, were temporarily closed, while almost all stores that remained open operated on reduced hours. Subsequently, the state of emergency was lifted in stages from mid-May, and all stores resumed operations on 3 June.」

「As of the end of April, 2,227 directly operated stores, representing approximately 9% of the Group's directly operated stores, were temporarily closed, while almost all stores that remained open operated on reduced hours.」

「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.」

「However, if abnormal weather conditions caused by extreme weather, global warming or other factors, or unpredictable changes in weather conditions such as typhoons and torrential rain, occur, or if earthquakes and resulting tsunamis, power shortages, wind and flood damage, lightning or other unforeseen natural disasters, the spread of infectious diseases such as novel influenza, sudden accidents, fires, terrorist acts, infrastructure disruptions or IT system failures cause partial business interruptions or damage to business partners, including suppliers, the Group's sales may decline, while manufacturing and shipment may be delayed and costs related to repairing, replacing or remanufacturing manufacturing and logistics facilities may increase, resulting in substantial losses and potentially affecting the Group's operating results and financial condition.」

「The Group is taking measures related to BCP (business continuity planning), including preparing business continuity plans. However, if abnormal weather conditions caused by extreme weather, global warming or other factors, or unpredictable changes in weather conditions such as typhoons and torrential rain, occur」

「If abnormal weather, global warming, typhoons, torrential rain, or other unforeseeable changes in weather conditions occur, this could affect the performance and financial position of our Group through weak sales, inventory disposal, and impairment losses.」

「If abnormal weather, global warming, typhoons, torrential rain, or other unforeseeable changes in weather conditions occur, this could affect the performance and financial position of our Group through weak sales, inventory disposal, and impairment losses.」