Intensifying Competition and Dependence on the Beauty Salon Industry

「In system sales, the users eligible for replacement sales in the current fiscal year are users who purchased systems in fiscal 2020 and fiscal 2021, when sales volumes were sluggish during the COVID-19 state of emergency. As a result, this is one of the years in recent years with the fewest eligible users.」

「However, in the beauty industry served by the company, the number of beauty salon bankruptcies reached 139 by August 2024, approximately 1.5 times the level in the same period of 2023, due to factors including intensifying competition between salons, soaring beauty supply costs and difficulty recruiting stylists.」

「Our group aims to differentiate itself from competitors by launching attractive, high-performance, value-added products. However, if competition intensifies, our group's competitive advantage is lost, or prices decline more than expected, this could affect our group's financial position and business performance.」

「Demand for beauty services at customer salons has remained firm despite the COVID-19 pandemic, and the number of salon visitors has gradually begun to recover as the number of infections has trended downward, according to the Company's estimates.」

「Although some beauty salons have temporarily closed or withdrawn from the market due to the COVID-19 pandemic, the number of salon visitors has gradually begun to recover as infection prevention systems have been put in place, according to the Company's estimates.」

「In the Company's ICT business for beauty salons, temporary closures and withdrawals by key customer salons became widespread, but the salons gradually put infection prevention systems in place and the number of visitors began to recover, according to the Company's estimates. However, the company expects that it will take some time for conditions to return to their previous levels.」

「In the Company's ICT business for beauty salons, the business performance of the key beauty salon market deteriorated sharply as a result of temporary closures and other measures, and employee dismissals, withdrawals and business closures became widespread.」

「However, although gradual, beauty salons are returning to their usual sales levels. The Company's sales activities were also suspended from late March, but it gradually became possible to resume them from July.」

「However, beauty salons were forced to reduce operating hours or voluntarily close temporarily under the nationwide state of emergency declared to prevent the spread of COVID-19, resulting in a significant decline in store sales. Visits and store sales at many beauty salons in April fell to 20%–55% of the prior-year level, according to the Company's estimates.」

「In the Group's ICT business for beauty salons, several companies sell software that competes with the Group's products. There are also new market entrants using new technologies such as smartphone applications and cloud services.」

「In the beauty salon industry, the target market for the Company's ICT business for beauty salons, the declining birthrate, population aging and chronic labor shortages, together with the rapid spread of smartphones and social media, have accelerated customer movement among salons, and excessive competition involving coupon discounts and other services to attract customers has become commonplace. Meanwhile, salons that implement effective measures to capture customers' interests continue to grow as market winners. This polarization is expected to progress further.」

「If competition with other companies intensifies, the Group loses its competitive advantage over them, or prices fall more than anticipated, this may affect the Group's financial position and operating results.」

「Apparently concerned about declining consumer activity due to torrential rain disasters and extreme heat, the company states that customers have become more cautious about making purchases.」

「In the beauty salon industry, the primary customer base for the Company's ICT business for beauty salons, the recovery trend that began around last summer has continued, and salons have become more proactive in opening new locations and making capital investments.」

「In the beauty salon industry, the recovery trend that began around last summer has continued, and salons have become more proactive in opening new locations and making capital investments.」

「In the beauty salon industry, competition among salons is intensifying because of business closures associated with population aging, a decline in people seeking to become beauticians associated with the declining birthrate, labor shortages at new and existing salons, and a shrinking beauty services customer base.」

「In the beauty salon industry, the Company's core business, sales have been showing signs of recovery since the summer season began in July, particularly among major salons. (July Family Income and Expenditure Survey, Ministry of Internal Affairs and Communications)」

「In Japan's beauty industry, sales have continued to decline since the consumption tax increase, owing to the entrenchment of consumers' cost-consciousness and labor shortages associated with the declining birthrate and aging population.」

「If competition with other companies intensifies, the Group loses its competitive advantage over them, or prices fall more than anticipated, this may affect the Group's financial position and operating results.」